McNair Paper Number 50 Chapter 6, August 1996

Roosevelt tapped Nelson to be Chairman of the War Production Board in mid January 1942. Certainly of all the civilian advisers the president had assembled, Nelson seemed best to appreciate the production problem. Probably nobody had a better background-for more than a decade he was the chief merchandising executive of the world's largest distributing firm, Sears. Perhaps nobody in America knew better where almost everything in the United States was manufactured, "how much and how well." (Note 42) Nelson was given a charter by the president to draft the Executive Order that would establish his new organization, (Note 43)and Roosevelt set the tone nationally in an address to the country on 6 January 1942 in which he described the production task at hand:

The superiority of the United States in munitions and ships must be . . . so overwhelming that the Axis nations can never hope to catch up with it . . . to attain this overwhelming superiority, the United States must build planes and tanks and guns and ships to the utmost 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 . . . 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.

I have just sent a . . . directive to the appropriate departments and agencies . . . ordering that immediate steps be taken:

To increase our production rate of airplanes so rapidly that we shall produce 60,000 planes, 10,000 more than the goal set a year and a half ago. This includes 45,000 combat planes-bombers, dive bombers, pursuit planes. The rate of increase will be continued so that next year, 1943, we shall produce 125,000 airplanes.

Only this all-out scale 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. (Note 44)

The Roosevelt aircraft figures (he called for an enormous increase in tank, artillery, and merchant shipping too) are cited to give an idea of his extravagant thinking and to underscore the nature of his grand strategy. We know from the Victory Program that such numbers were not contemplated, but in 1944 the United States did produce nearly 100,000 aircraft, dwarfing all allies and adversaries.

Roosevelt's Executive Order establishing the War Production Board on 16 January 1942, granted Nelson as Chairman broad powers: to exercise general direction over the war procurement and production programs, to determine policies, plans, procedures and methods of the several federal departments and agencies in regard to war production and procurement, to grant priorities for construction, and to allocate vital materials and production facilities. And while Nelson was the "Chairman" of the War Production Board, the rest of the board only existed to advise him. He could accept or reject its advice. (Note 45) Nothing in Nelson's charter indicates he was to be involved in grand strategy formulation. Nelson did not want to know anything about war plans. He limited himself to filling the materiel requests of those responsible for formulating grand strategy. If the services' plans called for a specified quantity of a system that industry could not produce, however, Nelson would inform the leaders. (Note 46)

This board grew into a bureaucracy of 20,000 people(Note 47) and remained in existence through the war and even into the post-war period under another name (Civilian Production Administration). Although the media pronounced Nelson the "arms czar" and "dictator of the economy" and "the man who had to tackle the biggest job in all history" the organization was superseded in 16 months when its authority was severely diluted by the creation of the Office of War Mobilization. Roosevelt did not give Nelson the support he needed to succeed, Nelson was not strong enough to demand both the president's support and noninterference from competing agencies (especially the Army and Navy), and he refused to seize all of the levers of power he needed in order to flourish. (Note 48)

His charter was to keep the economy strong while he mobilized American industry to produce to win the war as quickly as possible. There were two parts to the job-to build up materiel production and, where production could not be achieved quickly enough, to divide the shortages so that the least important elements would receive the least support. There were three basic problems that occupied Nelson and his staff throughout the war as they fought to increase production:

! Supplying raw materials from which the war materiel and essential civilian products were made

! Providing the plants and equipment in the factories to manufacture the tools of war

! Staffing the plants with enough people with the right skills.

"There was never a time" during World War II "when material supplies, plant facilities, and manpower were in perfect balance." (Note 49)

Having inherited the people and the organization of the Office of Production Management, the Supply Priorities and Allocations Board, and even the National Defense Advisory Commission, Nelson organized the War Production Board in similar fashion. Sidney Hillman, for example was chief of the Labor Division; the Production Division was put under William H. Harrison; the Industry Operations Division was under James S. Knowlton (president and chief executive officer of SKF Industries); the Statistics Division was run by Stacy May, etc. (Note 50) The Board also had divisions responsible for monitoring specific war industries and also had large numbers of people in the geographic regions of the country collecting data, providing advice, assisting plants, negotiating contracts, etc. (Note 51)

If America was to become the Arsenal of Democracy, it had first to convert its civilian-based industry to the task of producing war materiel. Nelson recognized that aspect of his responsibilities immediately, and the main industry to be converted was automobile manufacturing. This American enterprise was equal to the total industry of most of the countries in the world. In America the automobile industry was spread over 44 states and 1,375 cities. The primary contractors numbered more than 1,000, and there were tens of thousands of subcontractors. More than 500,000 workers produced autos and trucks when the United States entered the war-one of every 260 Americans. And 7,000,000 others-one out of every 19 Americans-were indirectly employed in the industry. Automobiles made Americans machine minded and made American industry oriented to mass production techniques. They consumed 51 percent of the country's annual production of malleable iron, 75 percent of plate glass, 68 percent of upholstery leather, 80 percent of rubber, 34 percent of lead, 13 percent of copper, and about 10 percent of aluminum. One of Nelson's first orders was to cut off car production, and the last automobile to come off the production line during World War II did so on 10 February 1942. This was an essential move because during the war, General Motors, Ford, Chrysler, Packard and a few other automobile manufacturers produced more than 50 percent of all aircraft engines, 33 percent of all machine guns, 80 percent of all tanks and tank parts, one-half the diesel engines, and 100 percent of the trucks the Army moved on. This industry also produced airplanes by the tens of thousands. Most of the B-24s, the most heavily produced airplane in the United States inventory, were manufactured by what had been the automobile industry and most of those were manufactured at one factory, Willow Run. About 20 percent of total U.S. production came from the automobile industry. (Note 52) In addition to tanks, jeeps, and trucks, "motor vehicle manufacturers were the largest single group of suppliers to aircraft manufacturers." The automobile industry produced more than $11 billion worth of aircraft, subassemblies, and parts, or about 39 percent of the dollar value of all military production by the automotive industry. It manufactured 455,522 of a total of 812,615 aircraft engines and 255,518 of a total of 713,717 propellers. The industry also produced 27,000 complete aircraft. (Note 53)

Of course, more than the automotive industry converted to war. One of the most striking examples is International Silver, which at the beginning of the war made tableware. By the end of the war this medium-sized firm was producing surgical instruments, Browning automatic rifles, 20-mm shells, cartridge and shell brass for many calibers of weapons, machine-gun clips and cartridge belts, magnesium bombs, gasoline bombs (3,000,000 of them monthly at peak production), adapter casings, combination tools, large and small rotors, contact rings, spring assemblies, forgings, connecting rods, trigger pins, lock bolts for all pins, flange and tube assemblies, front-sight forgings for guns, etc. (Note 54)

In addition to the shortages of time, plant, materials, and people, the War Production Board also suffered from unrealistic demands by the president, the Secretaries of War and Navy and various service chiefs. Through 1942 and 1943, the grand strategists set goals that were well above what could actually be produced given the status of American industry. In time the output was prodigious, growing almost geometrically into 1944. But in the first 2 years of effort, the overestimation of capacity by those not responsible for producing materiel was frustrating to those called on to produce it. (Note 55) Some of the demands, however, were not unrealistic, and Nelson underestimated the capabilities of American industry. For example, the president and the Joint Chiefs of Staff wanted to expand the military to a higher level than Nelson thought could be adequately supplied. The president announced a 10.8 million peak strength less than 6 months after Nelson became the Board chairman, and Nelson demurred. In time, more than an extra million men were added to that figure, and they were well supplied indeed. (Note 56)

Almost from the start, because the president and warrior chiefs expected more production than the Board seemed to be able to deliver, there was dissatisfaction with the War Production Board and Chairman Nelson. Nelson's sharpest present-day critic is Paul Koistinen (but, then, every serious student of the War Production Board is a critic except Nelson's public relations officer, Bruce Catton), who argues that Roosevelt deliberately chose Nelson because he was not likely to be a strong leader and that the president never intended to place full confidence in Nelson's management. Koistinen also argues that Nelson faced three tests at the outset if he wanted to achieve dominance over the wartime economy, and he failed them all. From the start he needed to get "tough with the industrialists who were coming to" his new organization from the Office of War Production and the Supply Priorities and Allocations Board. These businessmen, to Koistinen, were more eager to protect their narrow interests than to "harness the economy for war." Nelson, to win, also had to "bend the military which had grown powerful and practically independent to the board's will." Many commentators agree with Koistinen's first two points. His third is that Nelson should have given "labor, New Dealers, and small business a meaningful voice in mobilization matters so that the" War Production Board "involved broad-based, not simply big business, planning, and thus tapped the nation's full economic potential." Koistinen's criticism of the entire mobilization effort is slanted in this direction, and this third argument does not find resonance(Note 57)

Senator Harry S Truman's (D-Missouri) Senate Special Committee Investigating National Defense reported about a year after the Board was established that Nelson, with the expressed powers Roosevelt granted him, could have "taken over all military procurement," but he chose not to do so. Truman's committee argued that had Nelson indeed taken procurement from the Army and Navy "many of the difficulties with which he has been confronted in recent months might never have arisen. Instead, Mr. Nelson delegated most of his powers to the War and Navy Departments, and to a succession of so-called czars. This made it difficult for him to exercise the functions for which he was appointed. At the same time, none of the separate agencies had sufficient authority to act alone." (Note 58) Other commentators agree that Nelson's Board was fatally undermined within in its first trimester by voluntarily yielding "to the Armed Services both priorities power and the right to clear military contracts before the contracts were let to suppliers." With General Administrative Orders 2-23 and 2-33 in March and April 1942, Nelson "surrendered direct decision-making authority over the great bulk of the finished output needed for war." (Note 59) This was certainly costly to the power of his influence and his freedom of action, but he may have had no other realistic options.

The reader must consider here what battles might have ensued had Nelson decided to acquire for the Armed Forces. Surely the Truman Committee statement minimizes the turbulence that would have developed had Nelson fought the Army and Navy over acquisition of weapons systems. The service departments had been procuring for themselves for more than two centuries and would not have seen the wisdom of altering their practices abruptly and fundamentally in wartime. In addition to objecting to a War Production Board made up of manufacturers making key equipment procurement decisions, the departments would have opposed central and essential systems decisions being made by civilians not involved in the fighting. Arguing that Nelson should have procured for the Army and Navy is one thing; making such a system work is something entirely different.

The War Department, however, was almost certainly too generous with itself, and the number of contracts it let were enormously inflated. There were plants that the War Department ordered built that were superfluous, and given the limited amount of materials and construction workers, a surplus in one area meant a shortage in another. Locomotive plants went into tank production, "when locomotives were more necessary" than tanks. Truck plants "began to produce airplanes," which produced "shortages of trucks later on." (Note 60) Alan Milward makes a similar point, and bases his criticism on the lack of firm priorities. "Completely new factories," he writes, "were built with government help when there was no possibility that they would ever get the necessary raw materials to sustain their planned production." (Note 61)

One should not, however, make the mistake of believing that the War Production Board was impotent. It had the power to compel acceptance of war orders by any producer in the country, and it could requisition any property needed for the war effort. (Note 62) Advertising this potency meant that the Board's fullest rights did not have to be exercised too often. And Nelson's Board also controlled the supply of raw materials.