On 9 December President Roosevelt conducted a White House meeting with thirteen men representing all the war production agencies, the men who would have responsibility for implementing whatever grand plan they might develop. Among those present were Donald Nelson (director of the Supply Priorities and Allocations Board [SPAB]), William Knudsen (director of the Office of Production Management [OPM]),17 Robert Patterson (under secretary of war), Harry L. Hopkins (special assistant to the president), Henry L. Stimson (secretary of war), E. R. Stettinius Jr. (Lend-Lease administrator), and James F. Forrestal (under secretary of the Navy)—men whose points of view on war production were important and by no means unanimous.18
The meeting had no particular focus; the president had simply summoned his leading defense officials to ask, in effect, “What shall we do now?” Crucial differences of opinion immediately surfaced as to the adequacy of existing goals. While Nelson, depending on the analysis of May and Nathan, was optimistic concerning the achievement of a 1942 program (which seemed extraordinary by 1941 standards), Knudsen held that production could only reach 75 percent of what Nelson believed was possible. The meeting failed to resolve this basic difference in outlook, but instead turned to a general discussion of problems raised by the war. With the failure to reach a resolution, Nelson felt compelled to work with both May’s and Knudsen’s estimates simultaneously. Two days later, he wrote to the secretary of war for fresh information on the Army program and asked for totals of military requirements based on both conservative and liberal estimates of what industry could produce in all major product categories. Nelson and his assistants followed up in conversations with military representatives, where they pressed for higher goals, disregarding the position of Knudsen and his supporters. On Christmas Eve, May talked with Somervell—then assistant chief of staff, G-4 (supply)—and urged him to encourage his procurement officers to raise their sights.
Prime Minister Churchill and Lord Beaverbrook dramatically emphasized the same point when they visited Washington for the Arcadia Conferences, which took place from 22 December 1941 to 14 January 1942. In a meeting where leading American war production and military advisers were present, Beaverbrook pointed out that the United States had no experience in the level of losses its forces would incur in the coming Allied offensives. Moreover, he claimed that America had little conception of the productive facilities of the Axis powers or the number of Axis tanks its Army would have to contend with. He repeatedly emphasized that the United States needed to set its sights higher in planning for production of the necessary war materiel. He then called on the United States to plan for the production of forty-five thousand tanks in 1942 against Knudsen’s estimate of thirty thousand.19
The British leaders’visit was fruitful not only in terms of the joint conversations on the prosecution of the war, but also for its missionary effect on those American officials still dubious or needing more convincing that an all-out effort would be necessary. Specifically, the British representatives made clear that the United States would have to greatly revise upward existing production objectives for 1942 and 1943. As Nelson’s and Beaverbrook’s statements reinforced one another, the president addressed himself to this problem.
Near the end of 1941, Roosevelt requested, through Hopkins, that Nelson prepare a list of production objectives he considered realistic for 1942. In turn, Nelson, using the Victory Program compilations as his basis and, with further advice from May and Nathan, came up with a list of fifty thousand completed aircraft, forty thousand tanks, 112 major combat ships, and 7 million tons of merchant shipping. In addition, he proposed that capacity should increase steadily so that by the end of 1942 the annual production rates should be sixty thousand tanks and eighty thousand planes. The objectives were high, but no more impressive than those suggested by Beaverbrook.20
Writing to the president at the same time, Beaverbrook pointed up the need for even higher output in certain categories. Roosevelt’s reaction to these proposals was all that Nelson and his associates at SPAB could have hoped. On 5 January 1942 the president, writing to Knudsen and Sidney Hillman, associate director general of the OPM, directed the establishment of a munitions schedule that conformed approximately to Nelson’s list. On the following day, though, when the president delivered his message to Congress on the same subject, Roosevelt revealed that even Nelson’s goals, in his opinion, did not cover the need in the major categories.21 The totals were now set at sixty thousand planes for 1942, and one hundred twenty-five thousand planes for 1943. He fixed the tank totals for the two years at forty-five thousand and seventy-five thousand, respectively. Some twenty thousand antiaircraft guns were to be turned out in 1942, and thirty-five thousand the following year. The merchant ship goals were perhaps the most startling of all: 8 million tons for 1942 and 20 million tons for 1943.22 Nelson figured that Roosevelt’s “must” items would cost between $52 billion and $55 billion, which was generally in line with what Nathan and May considered practicable.23
Unfortunately, the president’s new “must” items were not the entire story. In fact, they were only the beginning. Because they were only a list of major end items, it fell to the services to design a balanced program around the “must” list. For instance, one hundred eighty-five thousand aircraft and eighty thousand tanks by themselves meant nothing. The aircraft needed airfields, maintenance and support sections, and munitions to shoot and drop. Tanks needed to be part of divisions, with artillery, engineers, infantry, and a host of other items for support. Moreover, the entire establishment required training bases, logistical depots, and the creation of an infrastructure to support modern mechanized warfare. All of this would have to be on top of Roosevelt’s “must” items, which were already pushing what the experts on national income believed was the outside edge of the possible. Without taking into account the feasibility of the task, in February 1942 the Army added a further $62 billion (through 1943) in demands to the “must” items.24
Virtually in an instant, the president and the Army had thrown out years of analysis and months of careful planning. When Nathan and May added the cost of Roosevelt’s “must” items to the Army’s supply program, they immediately realized there was looming trouble and began working out the numbers needed to convince everyone else they were walking into a crisis. The civilian economists within OPM (soon to be WPB) understood that if the president held to his “must” items, then the entire production program would become unbalanced and impossible to complete. But in those panicked weeks and months after Pearl Harbor no one was listening to them. After all, Roosevelt had already told the nation, “Let no man say it cannot be done.”
CHAPTER 8
The Great Feasibility Debate
On 19 February 1942, Nelson created the Planning Committee within the War Production Board (WPB) and gave it three problems to consider. First, it was to review the total munitions program in terms of the balance among its constituent parts—the relation of military requirements to essential civilian needs and to the total national economy. Once this was done, the Planning Committee was to examine the relationship between the shipping situation and the planned munitions program, and then examine the airplane program in terms of the feasibility of meeting the goal of sixty thousand planes for 1942.
Apparently, Nelson had not yet focused on the overall feasibility of the munitions program.1 Instead, the effects the war would have on the civilian economy and whether plane production could be increased sufficiently to attain Roosevelt’s goals consumed his interest. On the other hand, Nathan, the head of the Planning Committee, believed that the group’s most important task was to ascertain whether the munitions program for 1942 and 1943 was achievable in the time allotted. In John Brigante’s view, Nathan was alone in holding this view during the early meetings of the Planning Committee. According to Brigante, both Fred Searls and Thomas Blaisdell resisted Nathan on this point and urged that the committee focus on assessing the existing and prospective bottlenecks.2 They supposedly claimed th
at, while this would not present the larger view of the production effort, it would get them off to an active start by addressing specific, tangible, and presumably solvable problems. The actual minutes of the first Planning Committee meeting tell a different story, however:There was general agreement that the war munitions program must be analyzed item by item, as well as in terms of its over-all relation to the total production of the country. The Chairman [Nathan] noted, as an example of the interrelationship of these two approaches, that the building of additional plants may be criticized on either of two grounds: (1) That they would raise the schedule of munitions production to an impossible percentage of the total national production, or (2) that the building of particular plants would be a waste of construction materials, as the specific raw materials or tools that would be required for operations of those plants would not be available. . . . The Chairman announced that he asked the Statistics Division [headed by Kuznets] to translate 1942 and 1943 military objectives into terms of raw materials, so that this analysis may be available to the Committee.3
Not only did all committee members agree that a comprehensive feasibility study was an important undertaking, but they also had Kuznets make a preliminary presentation of the matter. Kuznets duly appeared before the committee on 13 March 1942 and suggested that there were two alternative approaches to the process of appraising military objectives: “One [approach] is to arrive at a feasible military production estimate by determining the total production of finished articles of which the country is capable, and subtracting from this total the irreducible minimum of production required for civilian requirements. The second approach is to analyze qualitatively the specific military requirements as compared to the specific resources for production.”
Kuznets argued that the overall quantitative approach should precede the categorical, qualitative analysis so the “outer limits of total military requirements” could be fixed. If those estimates proved to be infeasible when measured against the framework of total national productive capacity, they should be returned to the armed services for downward revision before attempting a quantitative analysis. A significant advantage of the quantitative approach was that “it makes possible a broad comparison of our war effort with that of other nations having longer experience with war production problems.” However, “the measurement of the war effort by total percentage of one year’s national income can be misleading if allowances are not made for the extent to which in any one year a nation is drawing on its accumulated stocks as distinguished from its current output.”4 Interestingly, Kuznets also pointed out to the committee, “If proper account were taken of German drafts on her own and conquered nations’stocks of goods, the percentage of German current output devoted to war production would be about 40 percent as contrasted to the 70 percent of German national income often attributed to war production.”5 At the end of this meeting, Kuznets’ offer to complete a thorough feasibility study was accepted by the board.
Nathan, who kept abreast of Kuznets’ ongoing work, informed the committee on 13 March that in order to meet the presently stated objectives of $75 billion of war production and expenditures for 1942, monthly expenditures for the year would have to average $6.25 billion dollars, and that, since the monthly expenditures were presently running at only $2.5 billion, this meant the rate of expenditure would have to rise to a level of $10 billion a month before the last quarter of the year to make up the difference. Because it was impossible to grow the economy efficiently to absorb this level of activity, the committee meeting ended by raising the possibility, for the first time, of cutting the munitions program by 25 percent. Nathan also broached for the first time the idea of creating a super-coordinating body that would combine oversight of military strategy and production activities. As envisioned by Nathan, this new body would examine strategic decisions in relation to production considerations and then determine the appropriate revisions of either.6 Later, when Nathan had fleshed out this idea and presented it to Somervell, it had the same effect as waving a red flag in front of a bull and probably underpinned much of Somervell’s resistance to entertaining arguments that feasibility constraints were restraining his procurement plans.
Nathan suggested to the committee that it inform Nelson that production objectives for 1942 and 1943 were unattainable and that it also propose to him that he advocate the establishment of a board “familiar with both the strategic and production factors, and authorize it to determine initially the reductions in specific objectives of the war munitions program that are necessary to impart feasibility and balance to the program.”7 The rest of the committee, however, convinced him to wait for Kuznets to deliver his full report before officially informing Nelson and asking him to act.
On 14 March Kuznets completed his report. Its findings, once presented to production experts outside the Planning Committee, proved unsettling. Based on the most optimistic projection of GDP growth, the most the military could hope for was a program consisting of $35 billion in expenditures for 1942. By adding in soft items such as food, the military could count on $50 billion in 1942 and $64 billion in 1943. Moreover, raw material shortages were already showing up and the present program for 1943 was completely out of line with expected supply. But this was not the end of the production program’s problems. Machine tool assembly was already hopelessly behind and there was no hope that production would ever catch up to planned factory construction. Furthermore, basic civilian requirements placed a cap on what percentage of GDP was available for any particular year and limited the 1943 military program to $64 billion.8
In sum, Kuznets’ analysis of all major criteria for judging the feasibility of the program concluded that the U.S. economy could not meet present total goals within the periods set.9 With Kuznets’ study in hand, the committee, with Stacy May in attendance, considered the feasibility question in much greater detail on 16 March and agreed to submit a formal recommendation to Nelson that he call for the government to reduce the total munitions production objectives. Afterwards, the committee discussed alternative methods of implementing its recommendations.
The committee then discussed Searls’ proposal that the procurement officers be bypassed and that Nelson himself should undertake reductions after consultations with strategy representatives of the armed services. Blaisdell suggested that they refer the matter to the president so that Roosevelt could designate selected military and production authorities to cooperate in establishing a practicable set of overall objectives. Nathan recommended, though, and the others (including May) agreed that Nelson should send letters to the secretaries of War and the Navy, requesting them to designate individuals with authority to meet with WPB representatives to adjust the Victory Program objectives for 1942 and 1943.10 In discussion, there was general agreement that the current estimates of the 1942 war munitions program must be cut by some 35 percent so that total expenditure on war munitions and war construction amounted to not more than approximately $40 billion.11
To accomplish this, Stacy May suggested revisions (see Table 8.1) to the 1942 objectives be made after careful scrutiny.12
Furthermore, May advocated that 1943 production objectives be limited to the rate of production achieved by December 1942, which he estimated would be $6 billion monthly. This meant that the government would cap 1943 military expenditures at $72 billion for 1943.13 Others claimed this figure was optimistic and pushed for a number that would not inflate expectations for the future beyond what they believed attainable but that still was within May’s estimate. After much discussion they decided on a 1943 total of $60 billion. The $12 billion dollar gap between May’s $72 billion estimate and the $60 billion limit that was reported to Nelson and through him to the Joint Chiefs of Staff (JCS) would subsequently allow the committee a lot of leeway in negotiations with the services. Thus, when the services balked at the extent of the cuts and later suggested a higher figure, May and Nathan felt free to appear magnanimous.
Table 8.1 May’s Production Revisions
>
1942 Stated Objectives (billions)Proposed 1942 Objectives (billions)
Total munitions: $62.6 $42.6
Planes 9.2 9.2
Naval ships: $4.8 $3.2
Merchant ships 1.8 1.8
Defense aid 3.1 2.0
Foreign orders 0.2 0.2
Ordnance, Army 15.6 9.2
Ordnance, Navy 3.7 2.4
Miscellaneous munitions, Navy $1.2 $1.0
Miscellaneous munitions, Army $7.5 $5.0
Industrial facilities $6.5 $4.2
Other construction $8.4 $4.0
On 17 March Nathan sent Nelson an extensive list of recommendations, summarizing the committee’s findings to date.14 The letter proposed a number of specific reductions in 1942 objectives, including the stunning call for large reductions in the 1942 and 1943 munitions program. According to Nathan, it was imperative not only to cut munitions spending, but also to cease contracting for new production facilities and machine tools because capacity was already beginning to run ahead of the labor supply and raw material resources.
For a week after receiving the Planning Committee’s recommendation, Nelson took no formal action. Then, on 24 March, he summoned his principal division heads for a conference to consider the entire problem. Participants included Sidney Hillman, W. H. Harrison, James Knowlson, May, Nathan, Blaisdell, and Ferdinand Eberstadt (then–executive director of the Army and Navy Munitions Board [ANMB]).15 As a result of this conference, May drafted a letter for Nelson to send to the secretaries of War and the Navy stating, “Our production program cannot go forward effectively until we have decided upon objectives which require an all-out effort and are practical of accomplishment.” The letter also requested that each secretary designate a representative to collaborate with the WPB in reviewing the war munitions program and arriving at specific requirements.16 Two days later, Brigadier General Lucius Clay, one of the chief officers of the services of supply, was designated as the War Department’s representative, and the committee assumed that the Navy would soon make a similar appointment. In Nathan’s opinion, Clay appeared to sympathize with the Planning Committee’s thoughts on feasibility—he had earlier suggested that the president’s 6 January goal for tanks needed reduction. This, combined with the associated reduction in other ordnance items, would have reduced the cost of the 1942 objectives by $5 billion.17
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