Working in a rush, Colonel Burns sent a copy to the Army for approval, with the blunt demand for a reply within thirty minutes of receipt. Marshall replied personally, “I concur in the above quantity objectives, but I consider it of imperative importance that means be found to advance the date for the needs of the first million herein scheduled for October 1, 1941.”34
Ground Army
Production for a combat Army of 1 million men 1 October 1941
2 million men 1 January 1942
4 million men 1 April 1942
Air Army
Production sufficient to meet air needs comparable to those of a ground Army of each stated size at each date; i.e.,
Annual production capacity of 9,000 planes by 1 October 1941
18,000 planes by 1 January 1942
36,000 planes by 1 April 1942
From later discussions held at the White House and from the recorded planning activities of the OPM, it is clear that Burns’numbers became the basis for determining military production requirements to support a growing Army. Possibly because Burns’ numbers arrived so closely to when Wedemeyer was completing his work, later historians confused the two. Every official history states that Wedemeyer delivered his Victory Program (Ultimate Requirements Study Estimate of Army Ground Forces) to the president on 11 September 1941. However, that claim is incorrect. It was a restatement of Stark’s Plan Dog that was delivered on this date. Moreover, a side-by-side comparison of Wedemeyer’s plans and assumptions with what the president actually received on 11 September shows that it incorporated none of Wedemeyer’s conceptions in the final product.35 Since the Army munitions requirements are not with the copy in the president’s safe, it is a reasonable assumption that they were not delivered at this time—at least not in usable form—making Burns’ and Aurand’s estimates the War Department’s default position.36
The production people, now led by Donald Nelson, still found the new 11 September document and the included production estimates nearly worthless for planning purposes because it consisted mainly of a troops estimate. While the Army might have a good idea of what it took to equip a million-person Army, the production experts had no clue: how many tanks, artillery pieces, blankets, and so on, in the end would that Army need? On 17 September Nelson had to request a new estimate of requirements. The War Department complied with a document that stated this was a “tentative” list of requirements for a “hypothetical” question about the needs for defeating “potential” enemies.37
Economist Robert Nathan later outlined some of the frustrations the production people confronted:We were trying to find out what the military requirements would be under varying assumptions and circumstances so we could have a basis for planning what raw materials, what factories, what machinery, what tools and what components we would need for the production of armaments. First I went to the Army and the Navy. When I asked them about military requirements, they asked “are we preparing for a land war, a sea war, or an air war, a defensive war on the U.S. continent?” I was not in any more of a position to tell them what kind of war to prepare for than I was to tell them how to build a bomber or a tank. There seemed to be no way to get those requirements because they indicated that such numbers did not exist.
I remember asking them: “What are your varying assumptions about defense? You must have some assumptions and some lists of quantities of weapons and planes and ships needed under varied assumptions.” They said, “We have no estimates of requirements under varying assumptions. If you tell us how many tanks you want, we have tables of allowances and can tell you how many tons of steel or how many pounds of this or that go into a tank, but we do not know whether this is to be a one-million-man Army or a ten-million-man Army.” I then said, “Give us the requirements for a one-million-man, and a five-million-man, and a ten-million-man Army.” Their reply was: “We are not going to do all of that work unless we have some indication of what kind of prospective hostilities we will face.”38
In late 1941, after much prodding from civilian production agencies, the Army and Navy Munitions Board (ANMB) finally delivered a list of raw material requirements required to support a 4 million–person military establishment. Apparently, the ANMB assembled this report without referencing the work done by the Army’s G-4 or its operations planning section, and there is no indication that the ANMB even knew of Wedemeyer’s work. In any event, the civilian production experts at the OPM found themselves less than impressed with the new ANMB estimates and forwarded a blistering note to Nelson, pointing out just how awful the military estimates were. For instance, over the next two years the Army claimed it needed 500 million pounds of aluminum, twenty-five thousand tons of copper, and 13 million pounds of silk. The civilians, however, placed these estimates at 1 billion pounds of aluminum, 1 million tons of copper, and 3 million pounds of silk. According to the letter’s author, Robert Nathan, the Army’s IMP bore no relationship to realistic demands. As for the Navy, Nathan considered their estimates as nothing more than wild guesses and stated the Navy did not possess the experts on its staff to undertake any meaningful estimates.39 It is impossible to determine the source of the ANMB’s raw materials estimates, but given that they were off the mark by orders of magnitude, it is not unreasonable to assume ANMB might also have fabricated estimates out of thin air.
The Consolidated Balance Sheet
Despairing of receiving a requirements list from either the War or Navy department, the production organizations took matters into their own hands. Stacy May, an economist/statistician working with the Supply Priorities and Allocations Board (SPAB), became so incensed with the poor quality of the military estimates that he created his own.40 From Colonel Burns’ memorandum, the production experts knew they would need to construct a 2 million–person Army by early 1942. By using that as a base, they could double the requirements on a prearranged schedule, as the Army size multiplied. What May needed was to create a template for a functioning Army around those numbers and then determine if there were sufficient raw materials and industrial capacity to build such a force.
May had come to Washington from the Rockefeller Foundation where, according to his boss, Donald Nelson, he had led a rather sheltered life among his graphs, research, and papers on social and economic trends.41 He was the first head of the Bureau of Research and Statistics at the National Defense Advisory Commission (NDAC) and continued in that position through succeeding production bureaus.42
Upon arriving in Washington, May met with Jean Monnet, who Robert Nathan and Robert Sherwood, in separate histories, both refer to as “the unsung hero of World War II.”43 Monnet had first involved himself with war production when he had headed the French delegation to Britain to coordinate inter-Allied activities on the outbreak of the war. When France surrendered, Monnet immediately did two things: he cabled the American government to ship all war materiel ordered by France to the United Kingdom, and then he closed the Anglo-French Coordinating Committee on his way to asking Churchill for a job.
Churchill immediately took him on as an adviser, whereupon Monnet began an unceasing quest to convince anyone who would listen that, if the British wished to survive, they must depend on America for the bulk of their industrial production. At a meeting of the War Cabinet, Monnet once placed a scaled map of England, Scotland, and Wales over the Northeast United States and told them that the map underneath held double the industrial production of the United Kingdom, and that it in turn represented only a tenth of U.S. industrial capacity. He was fond of telling people that the whole industrial strength of the United States, should it be directed toward war making, would construe “power never dreamed of before in the history of Armageddon.”44 Because of his obsession with enlisting U.S. production into Britain’s service, Churchill eventually sent him to the United States as part of the British supply and munitions board, directed by Arthur Purvis.
When he arrived in the United States, Monnet announced he had but one goal: to convince America to put its industr
ial capacity behind winning the war against Hitler.45 He has been described as a man of calm, cool reason, but one completely focused on his objective from which he never deviated.46 Nathan later described him in the following terms:He was a master operator at a critical time, when his rare talents were desperately needed. Monnet formulated issues and solutions in ways that evoked constructive and positive responses. His statements about American production being needed to win the war attracted much support, since no one had stated the problem in those terms before. Monnet’s operating and maneuvering were unbelievably creative, persistent, and ultimately effective. He would send cables to Roosevelt from Churchill or vice versa, and then he would prepare the reply for the other to send. He worked very closely with Robert Patterson and Jack McCloy, then Deputy and Assistant Secretaries of War. He knew Supreme Court Justice Felix Frankfurter, who was very close to the President and himself not an amateur manipulator. Monnet once said in a meeting with Frankfurter the words “arsenal for democracy.” Frankfurter immediately asked him to “never use that phrase again.” Monnet asked, “Why?” Frankfurter said, “I want that phrase for President Roosevelt.”47 And sure enough, Roosevelt later said, “The United States would be the arsenal for democracy.”48
One of the issues on which Monnet constantly harped was his conviction that all would be lost unless Britain and America established franker military ties and closer industrial collaboration. This was an idea that May had developed independently, and the two became natural allies.49 Monnet and May together became the disciples of close production collaboration and relentlessly pushed the idea on those who would listen. But this collaboration required the mutual exchange of detailed information, which both sides considered military secrets and were reluctant to share. Undeterred, throughout the winter of 1940–41 May kept pushing the argument that if the United States were really interested in helping Britain, both countries needed to produce a coordinated list of what they wanted—not as of that moment, but for a year or more in the future. May also argued that the United States had to know what Britain could produce, what its materiel potential was, and what its stockpiles were. However, such information was considered by both the British and the Americans as a deep military secret. There was no precedent for this level of intimate sharing of knowledge, and neither side knew how to do it, or even if it was possible. Even during World War I, neither Britain nor the United States had ever told the other what it was producing. While there had been some military integration, there was no industrial integration during the Great War.50
The best the British were able to say in 1940 and 1941 was, “We want as much as we can get of everything.”51 Of course, May would answer, “We knew that the British wanted all they could get of everything, but we had no way of knowing what came first, what they could do for themselves, and what their long-range planning was like.”52
A luncheon held in late March 1941 had an interesting follow-up. Attending it were Monnet, May, Purvis (chair of the British Supply Commission), and John McCloy (assistant secretary of war). From this meeting came unanimous agreement that there had to be a complete exchange of information between the United States and the United Kingdom, and that the British likely would confront defeat unless they learned how to get the most from the United States in the way of munitions and supplies.53 After some argument, the participants agreed that the figures for the British and American resources needed to be combined in one report. May’s staff then built a huge book with comprehensive categories and tabs, but with its columns blank. Then they filled the American columns with figures: total industrial and raw materials capacities, total industrial and raw materials potentials, as best they could figure those numbers out at the moment.54
Once the American half of the document was completed, Secretary of War Stimson sent May to Britain to fill in all of the blank columns with British information. For two months in late summer and early fall 1941, May conferred with the War Cabinet, the British chiefs of staff, and British production experts. Together they compiled a composite set of accounts that recorded all American and British war production potential.
One of the first problems May encountered was that Churchill had been right when he observed that the British and Americans were “two people divided by a common language.”55 British and American experts spent countless hours laying out a glossary of common terms to ensure that each term meant the same to both parties. Without this common lexicon, the joint requirements ledger May was building would have conveyed more misinformation than information. For instance, when the Americans said “car” they were referring to an automobile, while the British were more often than not referring to an armored vehicle. In terms of production values, each misunderstanding of that term alone equated to more than three tons of steel.
The completed document went by various names: sometimes the Stacy May Document, sometimes the Stimson Balance Sheet. The name that stuck was what the British called it—“The Anglo-American Consolidated Statement.”56 The report itself was a statement of statistical fact. It made no attempt to set targets for production, but restricted itself to realistic forecasts of output under existing programs and of stocks up to the end of 1942.57 Whatever its designation, it was a comprehensive listing of the British, Canadian, and American military requirements, current and potential production, and potential material stocks.58
The cold rows of figures were not flattering to the United States. With 2.5 times the combined population of Britain and Canada, America’s installed munitions production capacity was lagging far behind its ultimate potential and what the other two nations were producing. The stark numbers clearly demonstrated that the United States was a long way from being the “arsenal of democracy.”59
When it was completed, May took the massive thirty-five pound document and returned to the United States. He made his way through Dublin, Baltimore, and then by taxi to Washington, all without escort. As Nelson later said, it was a German spy’s ultimate fantasy: a plump, fortyish, dignified, preoccupied, American statistician, all alone and carrying what everyone who knew of its existence considered the most important document in the world.60 For the production experts, May’s report provided a sure measuring stick for use against Army and Navy orders. As the Army “expanded (which it did, from 2,000,000 in 1940 to 4,000,000, then 6,000,000 then 8,000,000 and beyond) our production requirements would necessarily expand in systematic ratio.”61
Despite its defects, the requirements under this real Victory Program represented a far more realistic statement than any previous study. They were also, when judged against any previous standard, enormous. So enormous, in fact, that the feasibility of the program was immediately called into question.62 In fact, because of an initial feasibility analysis conducted after May’s return, the program underwent significant modifications. Nelson, however, did not receive a final report on the feasibility of the Victory Program in terms of national industrial potential from Stacy May until 4 December 1941, three days before Pearl Harbor.63
So, in the final analysis, what was the actual Victory Program? It certainly did not have anything to do with the study Wedemeyer produced. Rather, it was a combination of two documents. The first, Plan Dog, written by Stark, became the basis of Anglo-American military strategy codified as ABC-1. It later provided the backbone for America’s basic strategic plan—Rainbow-5. Although Plan Dog outlined how America was going to fight the war, it was the Anglo-American Consolidated Statement, formulated by the now almost forgotten Stacy May, that determined what materials were available for the build-up of Anglo-American military forces.
There is, however, one further matter for those interested in how the Allies formulated requirements after May created the Anglo-American Consolidated Statement. While May’s work indicated what the requirements were for an 8 million–person Army, it did not say how long it would take the American economy to shift production and grow sufficiently to supply those requirements. In effect, May’s work told the military what it co
uld have to win the war, while Stark’s plans told how the materiel could be put to good use. What still remained unanswered was the very serious question of when it could be made available.
Two economists were already working on the answer to that question. What they came up with was far from pleasing, and led to some of the fiercest and nastiest military-civilian debates of the war. In the end, their pronouncements did more to determine military strategy and the timing of the great Allied offensives than all of the Allied national leaders and military commanders combined. Today, though, history has largely forgotten Robert Nathan and Simon Kuznets.
CHAPTER 4
The Economist’s War
Nobel Laureate Paul Samuelson commented in 1945, “the last war [World War I] was the chemist’s war, and this one has been called the physicist’s war. It might equally be said that this has been the economist’s war.” 1 Even so, for the most part the contribution of economists to victory in World War II has disappeared from histories that are more interested in the actions of the great generals and the swirling tides of military operations.2 Without the calculations of economists, however, World War II would likely have lasted much longer and cost the Allies hundreds of thousands if not millions more casualties.
How economists infiltrated into almost every area of the federal government is a story in itself. For our purposes, it is sufficient to state that it was rapid and pervasive. Just fifty years before World War II there had been only one individual in the government with the title of economist, and that person was listed as an “economic ornithologist.” World War I saw a few trained economists brought to Washington in policy positions, but their influence remained constrained to providing advice on price administration and shipping. They had little impact on mobilization planning. It was the Great Depression that brought economists into Washington policy circles, first by the hundreds and then by the thousands. By the time World War II began, the federal government employed an estimated five thousand economists.3
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