Freedom's Forge

by Arthur Herman

  Finally the train stopped, and the lights came up. The audience sat in stunned silence for a moment. Now they could see the diorama as it really was, with the enormous “skyscrapers” not much taller than a five-year-old child. As they filed out, each was handed a button to wear. It read, “I have seen the future.”

  And for tens of millions of them and their children, it was the future—not just in 1960 but for decades after. It was an American future. It was not as perfect as the one socialists and other utopians were promising, with an end to every human problem from hunger to housing—and not as regimented or disciplined as Fascists and Communists prescribed. There was no room here for the Aryan Superman or the New Soviet Man. It was simply better than they had now; a future built to human needs and comforts, not mighty ideals. To millions of Americans in 1939, that mattered more than some rational radiant order.

  In 1940 the Depression would enter its eleventh year. Average per capita income was two-thirds what it had been in 1929. Unemployment hovered just above 16 percent. The future presented by the GM men seemed dazzling, almost unrealizable. Even Knudsen and Sloan were impressed. Afterward they sat alone together in the pavilion’s press room. Knudsen murmured something about hoping people realized the dreams they had just seen were realizable through mass production and the spirit of free enterprise; “better methods, good wages, low prices, better tools, and plenty of hard work from everybody.”

  Then Sloan added, “But who knows what the world of 1960 will be like? The real world of tomorrow will outstrip anything we can imagine today.”15

  Later, Knudsen made a broadcast from the World’s Fair to his native land: “May God give continued peace to [Denmark] and her children, and may He also continue to give our beloved United States the progressive, go-ahead spirit, the democratic way.”16

  But his hopes for Denmark, at least, were misplaced. The last sentence uttered by the Futurama narrator was, “All eyes on the future.” On September 1 the future arrived.

  German tanks and planes roared across the Polish border. The next day France declared war on Germany, and on September 3 Great Britain followed suit. The Polish pavilion was declared closed until further notice. Italy’s and Japan’s, however, remained open, since although both were Germany’s Axis allies, both were still officially neutral. The priceless copy of Magna Carta on display in the British pavilion was supposed to go home when the fair closed on October 1. After high-level discussion, however, officials thought it would be safer to let it stay in the United States.*

  When the fair reopened on April 30, 1940, the mood was very different. The slogan of “Building the World of Tomorrow” was replaced by a more somber “For Peace and Freedom.” The Soviet, Czech, and Polish pavilions were gone. Newspapers were filled with news of French and British troops poised on the Belgian frontier in the event of a German attack. A pipe bomb set at the gate of the British pavilion went off, killing two New York City policemen.

  On April 9, German troops had invaded and occupied Denmark. Bill Knudsen would not hear a word from his four sisters for almost six years.17

  That spring the number of visitor was down, too. The public face of American industry had changed. The Aviation Building sported its first warplanes and pursuit fighters. The GM Futurama now included churches (their absence in 1939 had inspired some trenchant criticism) as well as a university. An exhibit at the Westinghouse pavilion showed the sterilizing effect of an intense flash of light on water drops. Westinghouse dubbed the show “Microblitzkrieg.”18

  For all its expectations, the fair didn’t revive American industry. Two weeks after its reopening, other events would do that. They forced Franklin D. Roosevelt to pick up the phone and thrust Bill Knudsen, to his huge surprise, into the national limelight.

  * * *

  * It would be returned after the war, in 1947.

  Bill Knudsen meets President Roosevelt in the Oval Office, May 30, 1940. © AP Photo/George R. Skadding

  You cannot just order a Navy as you would a pound of coffee, or vegetables or meat, and say, we’ll have that for dinner. It takes time. It takes organization.

  —Bernard Baruch

  ON TUESDAY, MAY 28, Knudsen sat in his office in the General Motors Building. The Detroit Free Press headline blared, BELGIANS SURRENDER ON KING’S ORDER. Knudsen, however, was looking over long rows of automobile production numbers. The phone rang.

  “Mr. Knudsen,” said a voice on the other end, “the president of the United States wants to talk to you—here he is.”

  The resonant voice with its mid-Atlantic drawl, familiar from radio and newsreels, came on the line. “Knudsen? I want to see you in Washington. I want you to work on some production matters. When can you come down?”

  Bill already had some idea what was coming. Bernard Baruch had called to give him a heads-up on what he had told Roosevelt. “I think you will be getting a phone call,” the elderly financier had said.1

  Knudsen told Roosevelt he could be in Washington the day after tomorrow. He had to see Alfred Sloan and the GM board in New York first, but they agreed that Knudsen would come to the White House at ten o’clock on Thursday, May 30. The president rang off.

  Knudsen sensed that his life was never going to be quite the same again. He had heard the president on the radio on Sunday night, announcing to the country his plans for national defense—what the president termed “readiness.” Roosevelt explained how in the past seven years the government had spent almost $1.3 billion on new armaments for the Navy, Army, and Air Corps, including some 5,640 new planes and 1,700 antiaircraft guns. With the worsening international situation, Roosevelt said, there would be need for more—and the government could not do it alone. He told the American people that he was going to ask private industry to help, and intended to call on key men in American business “to help us in carrying out this program.”2

  When Bill Knudsen told his wife and children he was going to be leaving General Motors to help the president with the defense effort, they were stunned. Why? they protested. America wasn’t in any war; why would he give up his life at home in order to move to Washington? Besides, they pointed out, Roosevelt was a Democrat and Knudsen a lifelong Republican. His twenty-year-old daughter, Martha, a coed at the University of Michigan, asked the final question. “Why are you leaving to work for this man now?”

  Knudsen’s answer was simple and direct. “This country has been good to me, and I want to pay it back.”3

  The Dane flew to New York that afternoon, where he had an acrimonious meeting with General Motors’ chairman and his mentor, Alfred Sloan. “War’s not coming anytime soon,” Sloan predicted. “Your duty is here with GM.”

  Knudsen shrugged. “The president of the United States called me,” he said quietly, “and asked me to come.”

  “They’ll make a monkey out of you down there,” Sloan predicted, who was no fan of Roosevelt or the New Deal. During the punishing United Auto Workers strike, he had had Labor Secretary Frances Perkins calling him up in the middle of the night screaming that he was a scoundrel and a skunk for not giving in to the union’s demands. “You don’t deserve to be counted among decent men,” she had ranted. “You’ll go to hell when you die.”4

  More recently Sloan had watched another GM executive of his, John Pratt, get called to Washington for service on Roosevelt’s ill-fated War Resources Board. Pratt had done his level best to give advice on how to coordinate industry with military needs for war materiel. His reward was being vilified in the left-wing press as a corporate shill, while New Dealers attacked the entire WRB as a haven of fascistic “Wall Streeters and economic royalists.” Interior Secretary Harold Ickes denounced the idea of giving business a major role in organizing for war, calling it an affront to democracy itself.5 When Roosevelt rejected the WRB’s final report and dismissed the panel, Pratt wrote Sloan a long account of the ill-starred affair. Sloan sensed that all a businessman would get in New Deal Washington was a swift kick in the pants.

  “What d
o they want you to do?” Sloan finally asked.

  “I don’t know, exactly, what the president has in mind,” Knudsen admitted.

  “And still you go?” Sloan asked, incredulous.

  Knudsen said yes. There was a full minute of silence. Then a tight-lipped Sloan said, “Very well,” shook Knudsen’s extended hand, and did not look up as Knudsen walked out.6

  William Knudsen was taken off the General Motors payroll that same day. His life in the automobile industry, where he had spent the past thirty years, was over.

  Yet the fact remained he didn’t know what Roosevelt was expecting of him. When he arrived by train at Union Station on Wednesday, May 29, it began to dawn on him that Roosevelt didn’t know, either.

  He reached the White House shortly before ten o’clock on the thirtieth. That day, across the ocean, French troops were joining the British in the evacuations from Dunkirk.

  Knudsen was greeted by a tall, gaunt man with a twisted smile and pointed chin. It was Harry Hopkins, the president’s most trusted advisor. One of the original architects of the New Deal, Hopkins had just left his post as commerce secretary to help Roosevelt organize the defense effort. He and Roosevelt had drawn even closer and he was now living in the White House, down the hall from the presidential bedroom. When Hopkins became engaged to be married, FDR had her move in, too.7 Roosevelt trusted no man more, and no one in 1940 understood the urgency of the task ahead more than Hopkins.

  Hopkins had been a pacifist during World War I. Now with France on the verge of collapse and Britain threatened, he was a pacifist no longer. “We cannot go on sitting here and saying that the war is so many miles away,” he had told the Herald Tribune a few days before. “We must get realistic…. Suppose this war lasts two or three years. What effect is that going to have on the economy of this country? This is not a matter of sitting down at the dinner table and talking about it,” he added. “I belong to the school that does not talk about things—you do something.”8

  Do something. But what? That is what Hopkins and Roosevelt hoped Knudsen could tell them.

  Hopkins shook Knudsen’s hand, then whispered, “The president has asked me to tell you that we can’t pay you anything, and he wants you to get a leave of absence from your company.”

  “I don’t expect any paycheck,” Knudsen replied, “and the other matter has been taken care of.” Then he was ushered into the Oval Office.9

  The president’s desk was littered with memoranda and statute books opened to pages describing and debating the president’s wartime executive powers. Roosevelt and Hopkins, who had been so decisive in intervening in the domestic economy with the New Deal, were still feeling out what powers they had to protect America from potential adversaries.

  Franklin Roosevelt stuck out his hand with his famous grin, his trademark cigarette holder tilting up almost toward the ceiling. Knudsen smiled back, gave a bow as was his custom, and took the president’s hand. A photographer was there to capture the moment with the click of a shutter and the flash of a bulb. Roosevelt the genial, gracious host and the master of the New Deal, in a light gray suit; Knudsen the king of Detroit, in a more somber dark suit with a patterned tie, looking all-business. The most extraordinary alliance in modern American history was about to be forged.

  Roosevelt thanked him for coming. Knudsen replied he was happy to be called. Happy to help.

  Then the truth of what he was really facing hit Knudsen fifteen minutes later when he and the president were ushered into a conference room. Knudsen discovered he was not the only one on FDR’s list. There was the silver-haired Edward Stettinius Jr., son of the great J. P. Morgan partner, and president of U.S. Steel, along with Chester Davis of the Federal Reserve Board, and Leon Henderson from the Securities and Exchange Commission. There was a large sloppy man in a nondescript suit: Sidney Hillman, president of the Amalgamated Clothing Workers, along with Ralph Budd of the Chicago Burlington Railroad. Rounding off the group was Harriett Elliott, dean of women from the University of North Carolina, who was there as “advisor on consumer problems.”10 She was as confused as Knudsen about what they were supposed to do as members of the Council of National Defense Advisory Commission, as Roosevelt proudly dubbed them. He explained that they were to be a branch of the Office of Emergency Management, which he had set up to dispense any and all executive powers that the situation in Europe might demand. When they had all met, Knudsen looked around the room and finally asked:

  “Who is boss?”

  It was a manufacturing term, meaning, Who is the person who will be running the shift and accepting responsibility for getting the job done?

  There was a burst of nervous laughter, which the president joined in. “I guess I am,” he replied.11 Then everyone was ushered into the Cabinet Room, where Knudsen found himself shaking hands with Secretary of War Harry Hines Woodring and Navy Secretary Charles Edison, as well as Harold Ickes and Labor Secretary Perkins. Roosevelt explained in vague terms what Knudsen and the others would be doing to help with the defense effort. He also reassured his Cabinet that NDAC’s role would be purely advisory. Knudsen, Stettinius, and the rest were not there to replace or supersede normal channels of Cabinet authority. With that, the meeting was over.

  Knudsen returned to his hotel that night convinced of two things. The first was that the NDAC had absolutely no legal status; neither the Cabinet nor the War Department nor the Department of the Navy was under obligation to heed their advice—nor was anyone else. No one had even been appointed as chairman. “There was quite a lot of confusion,” he wrote in a memorandum for himself. “In true New Deal style, [we have] no authority except what the President delegates piecemeal.”12

  The second realization was that if the council was going to have any real impact on how America would prepare itself for war, then its influence would depend entirely on how it presented the problem of how to convert butter into guns—or more precisely, turn an economy geared around producing consumer goods and services into making more weapons and war materiel than anyone had ever imagined.

  Despite a decade of depression and high unemployment, the U.S. economy was still the most productive in the world. Its steel mills had produced an impressive 28 million long tons of steel—although that was less than half of what it produced in 1929. Nonetheless, America still produced more steel, aluminum, oil, and cars than all the world’s great powers put together—almost three million cars in 1939 alone.13

  Yet this industrial output was less than met the eye when it came to getting ready for war. Something would have to be done to raise dramatically that steel output, for instance, which would be the primary sinew of machines of war, as well as to increase the production of iron and coal. In 1939 the American steel industry was at its lowest capacity in twenty years.14 Likewise a year’s production of aluminum, the primary material for making modern warplanes, would have to rise to a minimum of 750 million pounds. The industry’s twin giants, Alcoa and Reynolds, were making less than a quarter of that amount.15

  America’s merchant shipbuilding industry on both coasts was producing four ships a month, when it would need to launch hundreds.16 As for those automobile plants, switching to producing Army trucks and other military vehicles would not so be easy—even for leading truck manufacturers like GM, White, and Mack. Army trucks had dozens of specifications, from minimum speed and fuel standards to being able to drive where there were no roads, which would demand heavy retooling of auto plants.17 They would also be running on a supply of tire rubber, which would have to double at the very least, when its sources were thousands of miles away in South America and the East Indies.

  Great Britain had been mobilizing its factories, plants, and shipyards for war since 1936; Germany, since 1935; and Japan, long before that. Together with the Soviet Union, they were outspending the United States on weaponry at a rate of ten to one—even with the president’s expanding defense budget.18 How could America ever catch up?

  Yet Knudsen and his colleagues had no a
uthority whatever to force the changeover or order anyone to make anything. They would have to go from business to business with hat in hand, as Knudsen later put it, to persuade them to prepare for a war two-thirds of the American people opposed—including many businessmen themselves. Everything the NDAC accomplished would depend on the force of ideas and personality. Increasingly, because of his reputation, his rhetorical skill, and his sheer physical bulk, that meant Big Bill Knudsen.

  One of those in the room that afternoon who wondered if Knudsen was really the right man for the job was Henry Kaiser’s old friend Interior Secretary Harold Ickes. As the meeting went on, he found it “more and more depressing,” he confessed in his diary. Knudsen struck him as “hard and cold and dominating,” someone too impatient and too hands-on to work well in Washington. “I have heard that Knudsen even makes his own notes in handwriting.”19

  Even worse, Knudsen came from the world of General Motors and mega-capitalist corporations like Ford and DuPont, which “have vast interests in all parts of the world, including munitions,” and including Nazi Germany. That led Ickes to wonder about Knudsen’s patriotism and “his desire unselfishly to serve his country.”20 Above all, Ickes worried that Knudsen and his friends would use the rearmament program to get big business’s nose “under the Administration tent,” as Ickes put it, at the expense of labor (there was already talk about the need for unions to make sacrifices for the war effort, he noted) and the New Deal agenda.