The Great Depression: World War II Mobilization 1939-1943

Historic Events for Students: The Great Depression. Editor: Richard C Hanes & Sharon M Hanes. Volume 1. Detroit: Gale, 2002.

Introduction

“If you are going to try to go to war, or to prepare for war, in a capitalist country, you have got to let business make money out of the process or business won’t work.” Secretary of War Henry Stimson made this comment in 1940 as preparations for World War II (1939-1945) gained momentum (quoted in Koistinen, p. 580). The global war would pit Allied forces, eventually composed primarily of the United States, Britain, China, and the Soviet Union, against the Axis powers consisting primarily of Germany, Japan, and Italy. U.S. businesses would play a key role in the mobilization efforts for war and the New Deal policies and programs would be largely curtailed. Funded by large military contracts, industry provided millions of new jobs and higher incomes than had been available through the Great Depression when millions of workers had lost their jobs or faced pay cuts. The mobilization effort focused on industry producing massive amounts of war goods including ships, tanks, arms, ammunition, and warplanes. Due to the strong U.S. public mood against international alliances, however, it took Roosevelt almost six years of lobbying with Congress, industry, and the public to begin earnest mobilization efforts.

The 1930s was clearly a troubled decade throughout much of the world. In the United States the stock market crash and Great Depression that followed brought rampant unemployment reaching up to 25 percent of the workforce by early 1933, or over 12 million workers. President Herbert Hoover’s (served 1929-1933) ineffective response through 1932 brought considerable social unrest with hunger marches and food riots. President Franklin Roosevelt’s (served 1933-1945) arrival in early 1933 brought hope with his massive New Deal programs. But as the Depression lingered on, support for Roosevelt’s programs slipped.

Meanwhile, in Europe dire economic problems in Germany following its defeat in World War I provided a fertile environment for the rise of radical politics. On to this stage stepped Adolf Hitler and the Nazi Party. Hitler preached a strong nationalistic way of life and a return to power for Germany built on military expansion. Similarly in Japan a weak government was replaced by its military, which also had strong desires to expand its control over China and other East Asian areas. Japan is poor in natural resources for its economy, and the expansion was in part designed to gain better access to these much-needed resources. The military leaders strongly glorified war and the training of its soldiers. As a result, the military route to gain access was considered most desirable by the Japanese leadership.

Due to the delay resulting from the strong isolationist mood of the nation, the United States faced a massive effort to prepare for war as German forces under Adolf Hitler stormed through Europe in 1939 and 1940. Many war materials were needed in addition to raising a large military force. As in World War I (1914-1918), the United States entered the war late. With the invasion of Poland by Germany in September 1939, Britain and France had declared war on Germany. President Franklin D. Roosevelt (served 1933-1945) was becoming more apprehensive about European developments and wanted to begin preparations. He faced, however, a public not wanting to be involved in another war across the Atlantic Ocean. But the situation in Europe continued to become more critical. With the fall of France to Germany in June 1940, the United States began providing shipments of arms and other provisions to Britain.

Converting industry to war production from production of civilian goods moved very slowly from 1939 through 1941. War mobilization would prove to be the event that would break a seeming deadlock between the New Dealers of President Roosevelt’s administration and corporate leaders. The New Deal, a combination of economic relief and recovery programs first introduced by Roosevelt in early 1933, had taken a decided shift by 1935. The first two years had included efforts to work in partnership with business. By 1935, however, the focus of those designing the programs, the New Dealers, had decidedly shifted to relief for the common worker and reform of business activities. Business leaders met reform measures with much opposition. Earlier in 1937, business and the increasingly conservative Congress were able to block any further New Deal programs from being created. They opposed such a strong role of government in the United States economic system. With war looming, the New Dealers had their own plans to mobilize the nation with close oversight provided by government. Business leaders feared greater government control of the economy and they resisted Roosevelt’s early mobilization efforts. As a result, Roosevelt was hampered by several factors—a conservative Congress that had tired of New Deal programs, business hostility to New Deal programs, a public increasingly opposed to U.S. involvement in war overseas, and the lack of a specific crisis that could galvanize public opinion into unified action. The Japanese attack on Pearl Harbor on December 7, 1941, brought major changes including a full effort by the U.S. in 1942 and 1943.

The U.S. government was willing to spend as much money as needed to win the war. The federal budget increased from $8.9 billion in 1939 to over $95 billion in 1945. The gross national product, which is the total value of all goods and services produced by the nation’s economy, increased from just over $90 billion to almost $212 billion. The total amount of war materials produced by 1945 was staggering. U.S. factories had made 296,000 warplanes, 86,000 tanks, 64,000 landing ships, six thousand navy vessels, millions of guns, billions of bullets, and hundreds of thousands of trucks and jeeps. U.S. production alone had exceeded the combined production of the Axis powers. The Axis was comprised of Germany, Italy, and Japan.

Increases in jobs and pay finally brought the Great Depression to a close. With increased military spending for war production, optimism over the national economy returned after the trying times of the Great Depression. Many Americans returned to work producing military weapons and supplies and many others went into the service. As with the New Deal, not all benefited from new economic opportunities. Black Americans and ethnic minorities still faced discrimination and inferior job opportunities. Women, though gaining more employment opportunities, still were faced with unequal pay. Some barriers were broken through, and each group played a major role in the home-front industrial production.

Issue Summary

A Series of War Mobilization Agencies

As Germany was beginning its expansion through Europe in 1938, U.S. business remained economically sluggish from the Great Depression, which had lowered production and left many Americans unemployed. Germany’s invasion of Poland in September 1939 quickly led Britain and France to declare war on Germany. World War II had officially begun. Both countries had agreements with Poland to provide support in case of attack. The United States maintained its official neutrality, but President Roosevelt issued a proclamation of “limited” national emergency. It was time to begin looking at options toward planning for war. Roosevelt anticipated that if Europe and Britain fell to Germany, then the United States would be next to face the onslaught of Germany’s well armed military. The U.S. government’s first effort to begin preparations for war came with the creation of the War Resources Board (WRB). The board was to produce a plan identifying what would be needed to mobilize the nation’s industries. Also in 1939, the military released its own Industrial Mobilization Plan. Despite these planning efforts, little translated into actual action and few new jobs resulted.

By May 1940 German troops were sweeping toward Paris and thousands of British troops began evacuating Europe at Dunkirk on the French coast. Increasingly alarmed President Roosevelt asked Congress to provide $1 billion for the production of 50,000 planes. Following the fall of France in June 1940 and the beginning of a German air assault on Britain later that summer, Roosevelt brought back the National Defense Advisory Commission (NDAC). The NDAC had previously existed during World War I (1914-1918). The commission was composed of members representing labor, agriculture, industry, and public consumers. Roosevelt was still facing an isolationist Congress and public, and an industry not eager to shift its focus from consumer goods to war materials. Roosevelt believed the NDAC could better overcome these hurdles than he could acting alone. Congress significantly boosted defense spending in 1940 and passed the first peacetime military draft for the United States. The commission, however, had little authority except to advise what action it thought was needed. Mobilization continued to progress slowly.

Following his 1940 reelection and with the air blitz, or attack, of Britain by German war planes well underway, President Roosevelt replaced the administratively weak NDAC with the Office of Production Management (OPM) in January 1941. The head of OPM was William Knudsen, former chairman of General Motors. OPM was charged with getting industrial production going and distributing manpower and raw materials. As with the other planning organizations the OPM was largely controlled by corporate advisers who primarily acted to limit its authority over industry. Roosevelt was still having trouble convincing industry to replace their production of civilian goods with military production. Having little authority to require mobilization of industry, the OPM proved ineffective.

By May 1941, with Japan expanding southward toward the Philippines where the United States held direct interests, Roosevelt issued an “unlimited” national emergency declaration. This declaration gave the president substantial powers to coordinate military and civilian activities. Gradually the preparation for World War II was considerably expanding the presidency. Roosevelt, however, still did not seek to use this power to challenge the well-organized corporate powers.

The Japanese bombing of Pearl Harbor, Hawaii, on December 7, 1941, finally triggered full mobilization. Japan had hoped the attack would demoralize the United States and prevent it from challenging Japan’s expansion in the Far East, especially in the Philippines where the United States had held strong interest since 1898 when it was gained from Spain. The surprise attack by a massive air invasion consisting of 306 war-planes launched from Japanese ships situated some two hundred miles away struck hard at the main U.S. naval base and naval fleet in the Pacific region. The attack crippled the U.S. Pacific Fleet, sinking four battleships and almost two hundred planes. The United States also suffered 3,700 casualties. The United States public was shocked and enraged. War was declared on Japan the following day on December 8. Three days later Germany and Italy declared war on the United States.

In January 1942, while Germany was focused on capturing Russia, President Roosevelt established the War Production Board (WPB) to assume control over wartime mobilization. Corporate executives played a strong role on the board in addition to the military services. Industries were now required to convert to military production. The board sought to establish a system to distribute raw materials to industries based on priority needs. The manufacture of certain goods was limited, and in some cases was completely stopped so that raw materials such as steel and aluminum would be available for war projects. The actual procurement, or purchase, of war materials was left to the military services that worked closely with industries.

Still, the WPB did not have absolute power. The military and industry only loosely adopted board decisions. Because of business pressure, the government applied little formal oversight and repercussions for not conforming to decisions. Contractors at times would still delay working on military contracts if conflicts occurred with their civilian production. Also, at this time, the remaining New Dealers who had not left the administration when foreign issues took over and domestic funding declined desired to have the flood of military contracts spread around. They particularly wanted them to go to areas still economically depressed. The corporate leaders, however, dictated to the military services how the contracts should be awarded. Between May and September 1942 as the war against Germany spread to Northern Africa, 80 percent of all contracts went to areas already experiencing labor shortages from earlier work increases while other areas still suffered from high unemployment. By 1943 the alliance between corporations and the military was in firm control of mobilization. In dropping his reform efforts Roosevelt had begun to informally refer to himself as “Dr. Win-the-War” rather than “Dr. New Deal” as some, including the press, had previously called him.

As the war efforts progressed conflicts still rose among industries over access to materials and labor. Continuing concern over the progress of mobilization efforts once more led Roosevelt to create yet another small new temporary agency, the Office of War Mobilization (OWM), in May 1943. The German forces had surrendered in Northern Africa and the fight was about to move to Europe itself. Led by former U.S. Supreme Court justice James F. Byrnes, the organization was created to better coordinate activities among industries. OWM would resolve disputes that arose between industries over access to raw materials, labor, and other production issues. By July 1943, the wartime conversion of the U.S. economy was substantially completed. Allied forces invaded Italy that month leading to a surrender of Italy by September. Less than a year later a massive Allied force would land by sea on the west coast of Europe at Normandy. Through intensive fighting across Europe over most of the next year Germany would finally surrender in May 1945 ending the war in Europe.

Economic production in the United States more than doubled during the war years. After years of the Great Depression, the defense mobilization dramatically picked up the nation’s economy. Seventeen million new jobs were created. More people were taking home paychecks, and those pay amounts were larger than ever. Average workers’ hourly wages increased 22 percent through the war years. Debts incurred during the economic hardships of the Depression were paid, and savings began to grow once again.

The Home Front Economy

The war contracts awarded to industry produced a booming economy with eventual full employment reaching 98 percent employment of the workforce. Given its conversion to war materials, however, industry could only produce a limited amount of consumer goods needed at home. Therefore government had to establish some safeguards against inflation, which is when the cost of goods increase faster than income. This problem was solved in several ways. One approach was to take money out of circulation. This was accomplished through increased taxes and sales of war bonds. Another approach came in April 1941 with the establishment of the Office for Price Administration and Civilian Supply (OPACS). OPACS was created to stabilize prices and oversee the fragile civilian economy. With the rationing and shortage of domestic consumer goods, economic conditions were ripe for significant inflation that would weaken the war economy. OPACS set the maximum prices for most goods. New Dealers also saw OPACS as a way to challenge industry-controlled war mobilization agencies such as OPM and the numerous industry advisory committees that were forming to help guide individual industries. New Dealer economist Leon Henderson led OPACS. Henderson believed industry was slow in responding to the military needs of the nation while it still pursued a growing civilian economy that was improving as people gained increased income from wartime jobs.

To ensure the scarce civilian goods were distributed fairly among citizens, a rationing system was created. Reminiscent of the food stamp programs of the Great Depression, but for purposes of limiting consumption rather than expanding consumption, OPACS issued ration stamps that were used to purchase various items such as canned goods, meat, milk, cheese, and gasoline. Food was rationed according to family size. Gasoline was rationed according to individual needs. Most people got three gallons of gas a week.

An Employment Boost

Given the slow start, U.S. industry did not really begin feeling the effects of war mobilization until the summer of 1940, with the beginning of some war material production. Unemployment remained high into the middle of 1941, but shortages in certain types of skilled workers had already developed. The pace of mobilization picked up by the latter part of 1941 and more so after the attack on Pearl Harbor on December 7, when the nation firmly committed itself to a war on two fronts-in Europe against Germany and in Asia against Japan. The enlistment of men into the armed forces accelerated, and by early 1942 industry had to take more actions in attracting new people into the labor pool such as relaxing restrictions on minorities and women. Additionally, the need to shift workers from less-essential employment producing domestic goods to more-essential employment producing war materials became critical. Competition between industries over the available labor supply became more intense.

Labor shortages in certain areas, as a result of a shift in workers, led to the creation of the War Manpower Commission (WMC) in April 1942. The WMC was formed to help direct manpower into the more critical industries. Geared to get the most from the available U.S. workforce, the commission was to coordinate manpower needs of industry and the armed forces. It also facilitated the transfer of workers to industries considered more essential and which were facing shortages. In addition to more jobs available in private business and industry that received government contracts, the federal government, which had grown considerably during the Great Depression, grew substantially larger during the war. The number of federal civilian employees increased fourfold between 1941 and 1945 to oversee the war effort.

Mobilization was expensive. The federal government spent $290 billion on the war effort to mobilize and fight. To finance the war, several avenues were used to raise the money including taxes, the sale of war bonds, and obtaining loans. Taxes raised half the monies needed. The Revenue Act of 1942 increased taxes and established a national tax system that would continue into the twenty-first century. The system of withholding income taxes from paychecks began the following year, in 1943. Corporate taxes were also raised to 40 percent. The other half of the war expense was paid by selling liberty bonds and obtaining loans.

On February 9, 1943, President Roosevelt signed an executive order setting a minimum 48-hour work-week for workers in some industries and in certain areas of the nation where labor shortages existed. The War Manpower Commission would identify the industries and areas. Workers found that these changes in the workweek added greatly to their earnings, especially in industries subject to minimum wage requirements and for those in which unions had successfully obtained premium overtime payment. Industry also began working on an around the clock basis, using several shifts through the day. Large numbers of people worked in these industries and they received higher wages for the less desirable shifts, such as the midnight shift. Those working in industries producing aircraft, automobiles, ships, steel, and electrical machinery were particularly affected.

Workers also enjoyed wage increases reflected in hourly wage rates as well. By mid-1943 about 60 percent of factory wage earners, or over eight million workers, earned between 50¢ and $1 an hour. Three percent of the workers made over $1.50 an hour. Ten percent received less than 50 cents and two percent less than 40¢. These figures were well above hourly rates they received two years earlier reflecting Depression era rates. In January 1941, 17 percent of workers had made less than 40¢ an hour and 31 percent less than 50¢ an hour. With mobilization well underway in 1943, workers paid over $1 an hour were numerous in industries involving transportation equipment, rubber, machinery, and printing and publishing. Those workers earning less than 40¢ an hour were in food industries employing a relatively large percentage of women. The highest paid workers were almost all men. Those working in retail stores and non-war industries also saw improved wages, but at much lower rates than factory workers in war industries. Also wages of non-manufacturing workers were much lower than in the manufacturing industries. Wages in non-manufacturing rose considerably less than those in manufacturing following the beginning of war mobilization efforts. Nonetheless most were financially better off than they had been the previous decade.

Women in Mobilization

For women the war mobilization effort opened up many new job opportunities. Women had not had access to better employment positions up through the 1930s. Even with the improved job opportunities, however, gender discrimination remained a major factor. Through the 1920s women remained limited to domestic work and retail jobs. The Great Depression had only made conditions worse. Women were seen as competitors for jobs sought by unemployed men. As war mobilization began industrial jobs remained closed to women who were considered too physically inferior to perform industrial tasks. At first, plenty of unemployed men were available in the labor force. By 1942, however, with millions of men entering military service, industry began more aggressively recruiting women. The War Manpower Commission (WMC) focused on recruiting women where labor shortages were occurring.

Before long women were involved in almost all parts of the war industry. The number of women working increased from 14 million in 1941 to over 19 million in 1944 when 37 percent of adult women were working. In manufacturing, where women had been largely excluded earlier, the number of women working increased over 140 percent from 1940 to 1944. The percentage of women with jobs in the total labor force rose from 22 percent to almost 35 percent. By 1943 they even filled 10 percent of jobs in shipyards. New kinds of job opportunities opened including jobs in newspapers and radio stations. The number of women in labor unions quadrupled. Many government positions also became available for the first time. The percentage of government jobs held by women doubled from 19 percent to over 38 percent from 1940 to 1944. In addition several hundred thousand joined the military service.

Despite all of these job gains women were still largely excluded from management positions. Women faced discrimination both by employers and by unions. Though the National War Labor Board in 1942 called for equal pay for women for equal work, many employers did not comply. Women were placed in lower paying positions and received less advancement. Women were also the first to be laid off when war industry work began to decline.

Changes in the Workforce

Major changes in the workforce resulted from mobilization. Between July 1940 and July 1943, 5.3 million male workers were no longer available to industry because they had joined the military services. That figure was offset by the addition of 3.9 million female workers to the labor force for the first time in the nation’s history. By late 1943 the unemployment rate had dropped to a remarkably low 1.3 percent. Nine million workers had been jobless in 1939, as the nation struggled to make its way out of the Great Depression. By 1945, just six years later, that figure dropped to one million.

By 1943 the U.S. government was spending almost $90 billion annually on the war effort both in production of war goods and the actual combat expenses. The war effort was reflected in the nation’s gross national product. By July 1943, 47 percent of the U.S. gross national product was taken for military purposes. This figure was compared to nine percent in mid-1941 and only two percent in 1939.

Most of the increase in manufacturing during mobilization occurred in the production of durable goods—goods not destroyed in use, such as machinery. Earlier, during the Depression, employment in non-durable goods, such as chemicals, paper, rubber, textile, apparels, and foods, actually exceeded employment in durable goods, as people cut back on new purchases and saved their money for those items, like food, that they needed to survive and demand for durable goods fell. That relationship switched as the nation mobilized for war. By July 1943 almost 60 percent of factory workers were employed producing durable goods. Aircraft and machinery production and shipbuilding were some of the larger growth industries in durable goods. Regarding non-durable goods, the chemical industry saw substantial increases as well.

Mexicans and Mexican Americans

World War II opened new job opportunities to Mexican Americans and Mexicans once again. With many Americans joining the military services or opting for higher paying industrial jobs in the cities, a sharp labor shortage in agriculture occurred. This shortage led to the United States to reverse its repatriation policies of the Great Depression. The United States began a program to recruit Mexican field laborers back to the United States. The government of Mexico, however, would not readily agree to such a program for its citizens after how they were treated during the Great Depression. The Mexican government insisted the U.S. government provide transportation, medical care, shelter, and food. With the United States needing to increase food production for the war effort, an agreement was soon reached.

Beginning in 1942, several hundred thousand Mexican immigrants, called “braceros,” or “laborers,” came into the United States to work for the next few years. In addition many Mexican Americans already living in the United States found work in the war industries. For example, no Mexican Americans worked in the Los Angeles shipyards in 1941. By 1944 some 17,000 were working in the shipyards. Another 400,000 Mexican Americans also joined the military services. Discrimination against Mexicans and Mexican Americans did continue as it did against other racial and ethnic groups in the United States. They often received lower wages for the same work as whites and were given jobs associated with miserable work conditions.

Labor Unions and Mobilization

Unions, though not playing a critical role in planning for mobilization, still saw major changes. Union membership increased by 1.5 million workers during the prewar mobilization period of 1939 to 1941. During the war labor union membership rose between 1941 and 1945 by over 50 percent. From 1941 the number of union members increased from 10.5 million to almost 15 million in 1945. By 1945, almost one-third of the U.S. labor force were union members. The CIO, representing the mass production industries, such as steel, rubber, and automobiles, became almost the same size as the older AFL.

With the government setting wage caps, the main labor issues focused on working conditions and fringe benefits. Unions pledged not to promote strikes. Many wildcat strikes, or strikes without union approval, however, did occur over issues of safety and employee relations. As available labor became more scarce, the labor unions began to be more successful in seeking increased wages.

Prosperity was not seen in every industry. One industry that saw wages decline during the war was coal mining—despite record levels of production. Safety was a major issue as almost two thousand miners died between 1940 and May 1943. Finally the United Mine Workers, led by union president John L. Lewis, went on strike. The striking workers and Lewis met strong public opposition and were accused of not being loyal to the war effort. In reaction Congress passed the Smith-Connally War Labor Disputes Act giving the government power to seize and operate industries in which workers were on strike.

Overall labor and employers began communicating much better during the busier war years than during the Great Depression. Job security increased as well as the stability of industry. Unions became more a part of the fabric of industry and less independent and militant.

Regulating Wartime Wages

The Fair Labor Standards Act of 1938 established minimum wage standards that directly affected the wage rates of certain war production industries, particularly the large number of workers in the lower paying industries. The minimum of 30 cents an hour that became effective in October 1939 rose to 40 cents by the spring of 1943. Opposition to the wage requirements had lessened by 1941 as the competition for workers increased. The act also had addressed overtime payment. It stated that workers covered by the act must be paid at least time and a half their regular pay rates for hours worked over 40 hours a week. It was this overtime provision that most affected incomes during the war mobilization period.

To keep control over the rise in wages and prices, a comprehensive program of wage-rate controls was begun in October 1942. The National War Labor Board had earlier been established in January 1942 to address wage disputes. The October executive order also charged the board with implementing price stabilization measures. The board was to keep prices, wages, and salaries close to September 1942 levels. The board had extensive powers to review proposed wage and price changes. Increases did continue, but more under the watchful eye of the board especially when large increases were proposed. As result of the stabilization efforts, the wage rates in manufacturing had increased almost 26 percent between January 1939 and October 1942, when the executive order was signed. Wage rates increased only just over five percent between October 1942 and July 1943. Most of these earlier increases occurred after January 1941.

A New Industry and Military Alliance

Despite sharp conflicts with business over New Deal policies through the later 1930s, early on President Roosevelt had to seek cooperation from business for mobilization efforts. Besides backing off from New Deal reform initiatives, particularly any more regulatory legislation aimed at industry, Roosevelt also offered financial incentives to businesses. The incentives included major tax breaks for building new manufacturing plants to produce war materials, suspending antitrust laws so companies could more freely cooperate, and issuing military contracts to purchase war goods that would guarantee good profits. In addition to war plants built by private business, the federal government also built plants and leased them to companies on very good terms. President Roosevelt essentially turned the war economy over to the country’s business leaders. This both insured cooperation by industry and large profits for industry.

With business advisors brought in to help the Army and Navy prepare for war, the military began relying heavily on their main corporate contractors to make key decisions for them. A strong corporate-military association was forged. After years of economic stagnation through the Great Depression, business leaders were hungry to pursue profits from war mobilization. They favored the weaker oversight of mobilization by military leadership, with business advisors formally included in the oversight process, rather than the potentially more restrictive civilian agencies led by the New Dealers. Through this industry-military alliance, much government authority would be transferred to major corporations and trade associations. Despite Roosevelt’s consent for the arrangement, this transfer was in direct opposition to the New Dealers’ desire to take the lead in the name of public interest. The New Dealers wanted to use this opportunity of a rising economy to promote social equality. They opposed the concentration of economic power in a limited number of businesses. They believed social inequality and concentrated corporate power were the basic causes of the Great Depression. Therefore debates over mobilization were a continuation of earlier debates that had run in government throughout the Great Depression. Out of necessity to lead a nation in war, however, Roosevelt held a decreasing commitment to social reform. Many disappointed New Dealers began leaving government as New Deal programs were terminated with no new programs to take their place.

Individuals involved in the debates included Leon Henderson and Robert Nathan for the New Dealers and Ferdinand Eberstadt, James Forrestal, and Robert Patterson for the military-industry alliance. Eberstadt, Forrestal, and Patterson were all corporate leaders recruited to lead military mobilization. The instability of organized labor did not help the cause of the New Dealers. Battles between the American Federation of Labor (AFL) and Congress of Industrial Organizations (CIO) continued and even increased with the influx of new workers during the mobilization. As a result organized labor played much less of a leading role during war mobilization than many expected. The combined hostility towards labor by the increasingly conservative Congress, the military, and business leaders proved effective in minimizing labor’s influence.

Some New Deal Programs Close Their Doors

By 1940 a conservative Congress and numerous business leaders had gained increased power to develop government policy through the war mobilization program. Some New Deal programs did not fare well. Roosevelt himself understood the shifting nature of government and national priorities and realized his push for social and economic reform was largely over. The conservatives in government and business leaders strongly believed that New Deal programs were intrusive in private business and interfered with private initiatives. One of the more popular New Deal programs—and one of Roosevelt’s personal favorites—the Civilian Conservation Corps (CCC) came to an end in 1942. Originally established to employ young men in projects conserving natural resources, the CCC began teaching its enrollees how to read blueprints and do other tasks that would be useful in the military as the U.S. role in World War II began. As more men joined the military services the number of CCC participants declined. Roosevelt had suggested that the CCC might still be useful for youth below the age required to enter the military, but Congress chose to close it out altogether.

Another New Deal program, the Works Progress Administration (WPA), lost two thirds of its workers to the war industry in 1942, where pay and jobs were better. As the year 1942 came to an end, the WPA was closed out as well. The National Youth Administration (NYA) lasted until 1943 because it began teaching vocational skills to youth that would be useful to the war industry. But as the available labor pool shrank, on-the-job training in industry became more common and the need for the NYA ended. Programs regarding farmers, the Farm Security Administration, designed to assist low-income farmers buy machinery and land, and the Rural Electrification Administration, which had long been opposed by private utility companies, were also subject to funding cutbacks.

The National Resources Planning Board (NRPB), created in 1933 by the National Industrial Recovery Act (NIRA), was originally charged to oversee industrial recovery during the Great Depression. By the early 1940s the NRPB, looking ahead, began planning for the nation’s postwar economy. Its recommendations included expansion of social security for the needy and the poor and creation of public works projects. The projects would promote full employment once veterans returned from the war and the war industries scaled back to again provide just civilian production. Business leaders and the conservative Congress, however, were greatly alarmed by the proposals. They did not want to see a return to New Deal type programs fostering big government and growing influence over business. Congress reacted by cutting off funds to the agency, and it closed in 1943.

Despite loss of the NRPB and other New Deal programs, President Roosevelt did not entirely turn his back on social reform. To help maintain the wartime economic prosperity of workers, President Roosevelt, in the 1944 State of the Union address, proposed an Economic Bill of Rights. The proposal was a direct extension of New Deal ideals. He wanted to insure that everyone had a fair opportunity to have jobs, sufficient housing, education, and financial protection from old age, illness, and unemployment. The proposal, however, had no chance in the political climate. Roosevelt was able to extend generous benefits to war veterans. Congress passed the Servicemen’s Readjustment Act, more commonly known as the GI Bill. The bill provided unemployment benefits, preference to veterans for hiring, and low-interest loans for purchasing homes, farms, and small businesses. The programs provided a major benefit to veterans through the rest of the twentieth century.

End of the Great Depression

By 1943 factory towns that had been stagnant since 1929 were suddenly prosperous. The New Deal through the 1930s had been successful in lessening the economic hardships brought on by the Great Depression, but it took full war mobilization to end the Depression and get the nation’s economy moving again. The New Deal had attracted much antagonism, particularly from the business world and the South. As a result the corporate-military alliance, supported by Roosevelt, would guide the nation through World War II and beyond. The alliance’s primary postwar goal was to establish financial prosperity through strong national security and by maximizing corporate profits. New Deal ideals of financial security for individuals, particularly the poor, largely fell to the wayside until they were revived again in the 1960s.

The New Deal also lost its leader. Well after many of the New Deal programs had been closed, mobilization had ended, and military victory in World War II was in sight, President Roosevelt died suddenly, leaving what was left of the New Deal movement without its star player. Roosevelt suffered a massive cerebral hemorrhage while relaxing at his Warm Springs, Georgia, retreat on April 12, 1945. He died within minutes. Vice-president Harry Truman (served 1945-1953) took over the presidency and immediately faced many difficult decisions. He inherited the immense task of following in the footsteps of a highly popular president. One of his early momentous decisions was how to use the newly developed atomic bomb to end the war. His fateful decision led to the death of almost a million Japanese citizens as two atomic bombs were dropped on Japanese soil, one on the city of Hiroshima and the other on Nagasaki, leading to Japan’s surrender. On the domestic front, Truman did not discard all of Roosevelt’s ideals. He adopted many of his predecessor’s goals of providing economic security to citizens. Truman would later introduce the idea of the Fair Deal, a new postwar version of the New Deal. The Fair Deal proposals would include expanding federal government authority over industry as it transitioned back to peacetime production, national health insurance program, protection of minority rights in employment, and establishing more public power projects.

Contributing Forces

World War I Mobilization and Inter-War Planning

World War II was not the first occasion for the United States to mobilize for war in the twentieth century. The spread of war in Europe after 1914 finally led to the United States joining in World War I (1914-1918) in 1916. With the United States having a small national government with very limited powers prior to World War I, the nation’s corporate leaders had to step in and lead the mobilization effort for World War I. In particular Congress created the National Defense Advisory Commission (NDAC), which included corporate advisors to guide mobilization. Industry and financial leaders knew that government had to expand for war, but they wanted few permanent changes in the size of government. This same approach would be adopted for World War II in an effort to prevent growth of government aside from the military services. Therefore the NDAC promoted creation of industry groups to lead military purchasing programs. Businessmen were acting as government agents, often establishing contracts with their own industries. As war preparations progressed, public and congressional opposition grew to the heavy business role in governmental operations. As a result, the War Industries Board (WIB) was created in July 1917, to make the involvement of business advisors less obvious. Given the continued strong business influence, the WIB proved ineffective in decreasing corporate control of government activities.

Overall the U.S. military performed poorly in World War I. The military had greatly underestimated the size of the force that was needed to assist France and Britain in defeating Germany. As a result there were delays in getting an adequate forces, and once they did arrive they were poorly trained. Once there, the U.S. commander General John J. Pershing refused to use U.S. forces as reinforcements for the battle weary European forces, fighting separately. Much time was lost and inefficiency delayed ultimate victory. Embarrassed by the performance, Congress decided to continue military planning efforts after the war. This inter-war planning program continued the close cooperation between the military and business. In fact President Roosevelt and the New Dealers carried this model of military-industry cooperation into the New Deal government planning programs. The National Industrial Recovery Act (NIRA) was a primary example. Planning under the act was similar to the earlier WIB. Industry trade associations carried out government activities. This planning process, however, proved ineffective in economic recovery and Roosevelt abandoned this type of planning in 1935 for future New Deal programs.

Meanwhile the military, a major arm of the government outside New Deal activities of the 1930s, was gaining added experience in mobilization planning. Limited in size and extent of influence, the military suffered only limited affects of the Great Depression. The relationship between the military and major contracting industries strengthened due to interwar planning. At the same time Roosevelt was pursuing social and economic reforms under ever-expanding civilian government authority. The New Dealers, composed of lawyers, academics, and economists, opposed corporate roles in carrying out government activities. The reforms they proposed spurred conflicts between New Dealers who wanted the government to take a more active role in public life and business leaders who believed the expanding government was too intrusive in private business activities.

Late 1930s U.S. Political Developments

Strong Democratic majorities in Congress accompanied President Roosevelt’s landslide reelection victory in the fall of 1936. Those political successes by the Democratic Party appeared to be a strong endorsement of further New Deal solutions to the nagging economic crisis of the Great Depression. A series of factors, however, would derail this seemingly inevitable development. Roosevelt’s bold plan to reorganize the U.S. Supreme Court in early 1937 and a decline in the economy later that year caused many to question the effectiveness of Roosevelt and the New Dealers. Roosevelt’s plan to restructure the Court especially caused alarm not only among New Deal adversaries, but some of Roosevelt’s strongest supporters as well. Supporters wondered if Roosevelt’s critics had not been right after all, that Roosevelt was making the presidency far more powerful than the U.S. Constitution allowed. In addition Roosevelt’s support of labor unions and the increased occurrence of strikes in 1937 by unions seeking employer recognition, also alarmed conservative Democrats in Congress. Business continued to be very hostile toward New Deal programs. As a result of these events, a more conservative Congress was elected in the mid-term 1938 elections. The conservative Democrats joined Republicans in Congress to effectively stall further New Deal social reform programs.

Business leaders and the conservative Congress also feared a New Deal-like program to conduct the war. They wanted to block any further expansion of the civil part of the federal government. New Dealers saw the increasing war threat as another reason to expand governmental control over the economy. With no clear crisis pressing the U.S. into war in 1939, business leaders did not quickly respond to Roosevelt’s urging for war mobilization. They feared business could become a war casualty with greater governmental regulation introduced by New Dealer control of wartime economic mobilization. The conservative Congress and the strong isolationist mood of the public also hampered Roosevelt’s attempts to strongly push business.

Europe in Turmoil

Under the dictatorship of Adolf Hitler, Germany pursued a major mobilization or rearmament, or a build-up of weapons, program from 1935 to 1939. It applied lessons learned from the earlier war in its mobilization plans for World War II. Some of the last major battles of World War I showed that tanks and airplanes had become key weapons in waging war. As a result, massive offensive attacks became much more effective. Mechanization of the military, therefore, was the key to Germany’s future war strategy. By 1939 the German air force, known as the Luftwaffe, was the most modern, efficient, and well equipped in the world. The mass-produced German armored tanks would become a key part of the World War II blitzkriegs, or rapid-hitting offensive attacks. The German tank divisions had no equal in Europe at that time.

During the inter-war years of the 1920s and 1930s, other European nations such as Britain and France did not produce new weapons nearly as quickly as Germany. In fact by 1939 Britain did not have any armored divisions in its military. Additionally, the technology of military airplanes had changed greatly during the inter-war period. They had become bigger, faster, and could fly much farther. Bomber planes were also becoming much larger and were capable of carrying more and larger bombs. Like the United States, many of Britain’s and France’s planes were becoming outdated in light of these technological advancements.

Germany’s invasion of Poland in September 1939, spurred by Hitler’s desire to conquer all of Europe and place it under German control, showcased the application of high-speed armored warfare. The Germany military used large numbers of armored tanks supported by swarms of aircraft to sweep with great force and speed across the border and deep into Poland. The German invasion force consisted of 1.5 million troops, six armored divisions and four divisions of personnel carriers carrying troops swiftly to battlefronts. It was clear wars now would require considerable industrial production programs. Even though Germany had a far inferior navy to the Allied forces (composed of Britain, France, and their allies), they made use of submarine attacks, known as U-boats. During the first four months of war these attacks sank 110 vessels, including a British aircraft carrier and a battleship.

Germany was not the only aggressor in northern Europe. Russia, operating through a secret pact signed with Germany, also invaded Poland. Russia, like Germany, was intent on expanding its influence and control of the Eastern European region. Russia thundered in from the east on September 17, 1939. Russia also annexed, or took possession of, Estonia, Latvia, and Lithuania, and then invaded Finland on November 30. Though first repelled by Finnish troops, Russia made a renewed assault on February 1, 1940, and Finland surrendered on March 6, 1940.

After a lull of several months in the German ground offensive in Europe following the conquest of Poland, Hitler renewed his expansionist efforts. During this time the Allies did little, and many began calling this the “phony war.” The lull, however, soon ended. On April 9, 1940, Germany attacked Norway and occupied Denmark. Then, on May 10, Germany launched its attack on France and the Netherlands. At the time, France’s army of 800,000 soldiers was considered the most powerful in Europe. With news of the new German assaults on Western Europe, British Prime Minister Neville Chamberlain (served 1937-1940), who had not supported a strong British involvement in the war, resigned. Prime Minister Winston Churchill (served 1940-1945), a much more aggressive leader, replaced him. The German forces swept through Western Europe with incredible speed, leading to an eventual massive evacuation by late May of British troops and others from Europe at the seaport of Dunkirk in northern France. The evacuation, though saving over 338,000 lives, left behind all of Britain’s heavy military equipment. On June 14 German forces entered Paris and, two days later, France surrendered. The isolationist position of the U.S. public and Congress was beginning to weaken with this turn of events. Roosevelt boldly sent Britain a half million rifles and 80,000 machine guns to replace arms left at Dunkirk.

Roosevelt and others were concerned about Germany’s military expansion through Europe. In particular they feared that the fall of Europe to Hitler would make the Western Hemisphere the next step in Nazi aggression. Clearly some Latin American countries, with their political and economic instability, were vulnerable to the growing German influence. The United States could end up surrounded by a vastly superior armed aggressor. As a result, the fall of Poland, France, and other western European countries directly fed the debate in the United States over war mobilization. Isolationist feelings of the public and Congress were beginning to melt. War mobilization had become the top issue in Roosevelt’s administration.

Following the collapse of France, Hitler looked next toward the conquest of Great Britain. With the English Channel, ranging in width from 21 to 100 miles, separating Britain from Europe, Germany was going to rely primarily on air warfare to defeat Britain. Germany had 1,300 bombers and 1,200 fighter planes compared to Britain’s 600 fighters. But Britain also had a newly developed radar system. This new technology, used for the first time in defending against the German assault, would prove crucial in alerting British forces of approaching German planes. The German air assaults began in the summer of 1940 and increased through the following winter. There were relentless bombings of London and other cities. Much anxiety existed in Washington, DC, Roosevelt and others believed Britain was the last stand of defense before the Western Hemisphere would become vulnerable to German expansion. British air defenses, however, proved superior, shooting down German planes faster than Germany could produce them. Germany would eventually lose 1,700 aircraft to Britain’s 900. By May 1941 the German air assault declined. It was during this early period of war from 1939 to 1941, with the fall of France and attacks on Britain, that the U.S. began gradually mobilizing.

Japanese Expansion

The Great Depression hit the Japanese economy hard. As international trade declined many businesses in Japan failed. The democratic Japanese government was losing the confidence and support of its citizens. Through the early 1930s the Japanese military began assuming greater powers. Being a relatively small island, Japan did not have many of the natural resources such as oil and coal necessary for its industry to revive. The Japanese military leaders decided to establish a colonial empire much like Britain had done in India. In 1931 Japan seized Manchuria in northeastern China. Manchuria was rich in iron and coal. Though condemned by other nations of the world for its act of aggression, no action was taken against Japan. The peace and isolationist movements in the United States and elsewhere limited any forms of more aggressive reactions.

Following the invasion of Manchuria in 1931, in 1937 Japan attacked China leading toward war. Japanese planes bombed major cities, including that Chinese capital of Beijing. Killing thousands of Chinese citizens, Japanese troops gained control of central and northern China. Still the United States, determined to maintain its isolationism, did nothing in response to Japanese aggression, though concerns grew over threats to the U.S. territories of Guam and the Philippines. In July 1941 Japan began a southward push into Indochina, consisting of present-day Vietnam, Laos, and Cambodia. With this new expansion, the United States took action by cutting off trade with Japan, including much needed oil, in an attempt to diplomatically discourage further action by Japan. In early November 1941 Japan sent a special diplomat to Washington, DC, to discuss peace and an end to the trade embargo. With the talks not progressing well, the United States learned that Japan might attack U.S. military bases somewhere in the Pacific and a special alert was sent to military commanders, including those at Pearl Harbor in Hawaii. Shortly after the alert, the devastating strike came at Pearl Harbor, killing 3,700 people including many U.S. servicemen. The United States could no longer maintain isolationism. Faced with an attack on its people, on its shores, the United States became an active participant in World War II and entered into a major wartime mobilization effort at home.

Perspectives

America’s Workers

Though at great expense in human life and suffering, the wartime economy brought the American worker financial security once again. Many American factory workers saw a major boost in average weekly earnings between January 1939 and July 1943. During that period, hourly earnings increased an average of 52 percent while the weekly earnings increased over 84 percent, from $23.19 to $42.76 a week. The weekly earnings increased more when longer workweeks and overtime pay became more prevalent. In addition wage incentives offered to increase production also led to greater weekly earnings. Promotions and bonuses became more common as labor shortages increased. Given the rise in prices of goods during the war, the average purchasing power of factory workers increased by almost 50 percent. Workers enjoyed this increase primarily after the summer of 1940. Other salary increases also occurred in transportation, government service, and mining. Despite the increases in many sectors of the economy, some industries, such as construction, actually declined in employment.

A key part of the durable goods industry was manufacturing. Workers in manufacturing industries particularly enjoyed increases in prosperity, particularly because durable goods were in demand to aid the war effort. Employment in the manufacturing industries increased 70 percent between 1939 and July 1943, the most in any U.S. industry. With workweeks lengthening, the total number of hours worked in manufacturing in the United States increased by 100 percent. The average number of hours worked in a week increased from less than 38 hours in 1939 to more than 44 hours in 1943, an almost 18 percent increase for an individual worker. The average number of hours worked in a week by workers in manufacturing rose from 40.6 hours to 45.2 hours from 1941 to 1942 alone as mobilization escalated. Some workweeks were longer, such as machine-tool manufacture, which averaged 50 hours a week. Workers in manufacturing saw their average weekly earnings increase 65 percent from $32.18 to $47.12 from December 1941 to April 1945. Accounting for inflation during that period the increase in real earnings was still a strong 27 percent.

Farmers also played a large part in mobilization and enjoyed the financial gains. Although farm population declined by 17 percent during the war, farm production significantly increased. Many rural residents joined the military or moved to the city for factory work. Instead of the crop reduction policies of the New Deal under the Agricultural Adjustment Act, farmers were once again pressed to produce more. Advances in pesticides and fertilizers, machinery, and scientific advances contributed to this greater productivity. Correspondingly, farm income expanded as well. Farm prices more than doubled during the war and profits soared. After 20 years of economic difficulty since the end of World War I, farmers finally enjoyed prosperity again. Crop surpluses disappeared and produce prices rose. Net farm income increased from $5.3 billion in 1939 to $13.6 billion in 1944. The increase in income per person was actually greater for farmers than for industrial workers through the war years. Farm communities prospered and some became economic leaders in their regions. Farmers spent their profits on more land and improved farm machinery.

National Perspectives

On a national level private industry and the New Dealers in the civilian sector of government had very different ideas on how to mobilize the nation for war. Key decisions had to be made related to converting privately owned industries, expanding the mining and processing of raw materials, controlling how raw materials were distributed, and overseeing the military purchasing of war materials. The military had traditionally relied on the nation’s largest corporations and their prime contractors. The New Dealers in Roosevelt’s administration wanted to see this heavy reliance on big business end. They wanted to open up opportunities for military contracts to small businesses as well. New Dealers believed public needs and policies should take clear priority over private corporate interests of big business. Not only did New Dealers wish to get military contracts to smaller companies, but also to companies located in parts of the country still facing the Great Depression’s effects. To accomplish these public goals, the New Dealers sought a central role in mobilization efforts.

Industry, on the other hand, wanted no interruption of their private civilian production or interference with civilian markets. Believing the war would be brief, they did not want to hamper production of civilian goods. So industry wanted military production only in plants built with public funds or through special financial arrangements. They also wanted to be as free as possible of New Deal social reforms and labor laws, including limitations on profits. Business did not want to see increased wartime regulation. They clearly wanted no new permanent, large federal agencies to control mobilization and perhaps control the U.S. economy after the war.

The New Dealers were stymied by a conservative Congress and the strong anti-war mood of the nation’s population. As he did during the Great Depression, Roosevelt had to make compromises to reach his goals of preparing the nation for war and build national unity. The nation’s business leaders, hostile toward the New Deal programs of Roosevelt, played a strong role in shaping Roosevelt’s wartime policies. Given the initial deadlock over how war mobilization should proceed, Roosevelt had to rely on a set of small temporary agencies heavily staffed with private business advisers. The War Resources Board (WRB), created in 1939, developed a decentralized plan based on voluntary industrial compliance.

The struggle over control over military mobilization between New Dealers and industrial leaders continued into 1940. Then, with the crisis of war becoming stronger and having to face a conservative Congress and the strong public mood of isolationism, Roosevelt chose to join forces with the corporate leaders and abandon any plans of developing a civilian government plan for mobilization. The corporate leaders and the military were called to take the lead while trying not to cause undue alarm to the isolationists. Though Roosevelt did not officially adopt the earlier WRB plan, the mobilization effort largely followed it. In addition to the later war planning agencies and a much stronger military involvement, was the creation of various industry advisory committees. War mobilization gave corporate leaders the opportunity to regain prestige and political power lost during the Great Depression. The New Dealers largely faded to the background in regards to war mobilization.

The corporate leaders opposed interference by New Dealers and organized labor. They did not want to see wartime authority placed into existing government agencies in which new permanent oversight of corporations would be established. Their desire was to rely on corporate volunteerism organized through temporary government agencies. Corporate leadership wanted a government role that could easily be dismantled following the war. Such was the War Resources Board dominated by corporate advisors. The board was the first mobilization agency. A series of such agencies evolved guided by business advisors as well as industry advisory committees and the military services. The corporate leaders supported expansion of military responsibilities. Industrial and financial leaders were united in this approach.

Conceding to the influence of industry in shaping U.S. mobilization policies and seeking to unify the nation as best as possible, President Roosevelt appointed Republican Henry L. Stimson as Secretary of War. A strong big business advocate, Stimson led the government in choosing to follow the guidance of industry leaders in preparing for war. This included providing industry with certain levels of support in various ways. As part of industry’s demands, financial incentives and tax breaks were provided to support expansion of existing plants. Businesses wanted to minimize impact on their production of civilian goods and the profits that they were currently enjoying. Companies were also given some freedom from antitrust actions. They could cooperate with other companies if they could show their working relations were sufficiently important for war production. In addition, the government, trying to gain cooperation of industry, essentially guaranteed profits for contractors through a special finance system. Companies were guaranteed payments a certain percentage above their actual expenses in producing war goods.

Business advisers flooded into Washington, DC. Many business advisers stayed on their companies’ payrolls while they served in federal agencies. They brought an entirely different perspective of the role of government than what the New Dealers had been promoting earlier. They believed in the limited role of government and the importance of big business. Under the advice of business leaders, contracts were primarily awarded to the largest corporations who had the largest pools of labor, research departments, and established assembly lines. Advisers contended these companies could be most readily converted to military production from civilian production. As a result, the 10 largest corporations of the early 1940s received one-third of all war contracts. The top 56 companies received three-fourths of the military contracts. Smaller companies were largely left to scramble for subcontracts from the bigger companies. Many small firms went out of business since the large companies were given priority access to raw materials by the federal government. In addition to small manufacturing firms going out of business, some three hundred thousand retail businesses also folded in 1942 not long after the war began. It was one of the sharpest drops in the number of businesses in U.S. history. In total over a half million businesses closed during the war.

International Perspectives

European allies had been thrust into war well before the United States. By late 1940 much of Europe had fallen to Germany, and Britain was enduring continual aerial assaults. Much to the dismay of European leaders and citizens, the United States had not been involved in supporting various European countries against Germany, due to its strong mood of isolationism. Even Great Britain had been only half-heartedly involved in the war effort until spring of 1940. That spring, Germany began its military offensive against Western European countries including France, and Prime Minister Chamberlain was replaced by Churchill. Great Britain and German-occupied parts of Europe, however, began looking increasingly to the United States for assistance.

Prime Minister Winston Churchill of Great Britain pressed harder for support from the United States, but public sentiment in America remained strong against entering the war. Following his reelection in November 1940 President Roosevelt addressed the nation in a fireside chat. Trying to drum up support and sway public perspective away from isolationism, he stressed that if Britain fell to Germany the United States would be in great peril. Roosevelt asserted that the United States would have to become “the great arsenal of democracy” to help defeat the Axis powers, represented primarily by Germany and Russia, as well as some smaller Eastern European states. The nation, however, could still officially claim neutrality while offering limited support to its allies.

Britain was largely out of cash by late 1940. Roosevelt offered a new plan of payment to Britain called lend-lease. This plan would replace the “cash and carry” plan established in late 1939. In the earlier plan America would sell arms to other nations as long as they paid cash and carried them home in their own ships. Under the new plan the United States would lend or lease arms and other supplies to any country whose defense was essential to the United States. U.S. isolationists strongly opposed the plan, but Congress passed the Lend-Lease Act in 1941, and Britain began receiving much needed supplies. The United States ultimately spent about $50 billion under the act. Not only was lend-lease aid sent to Britain, but to other nations as well, including Russia when it suddenly found itself under attack by Germany in June 1941. As British shipments of U.S. lend-lease supplies increasingly made their way across the Atlantic Ocean, Germany began launching hundreds of submarines to attack in an effort to hinder the receipt of arms from the United States. They operated in groups of 15 to 20, known as wolf packs. Between April and May 1941 Germany sank 1.2 million tons of British shipping. The U.S. supply of goods to Allied powers made on the home front proved invaluable in holding out against German onslaughts until the U.S. actively joined the war.

Impact

War mobilization revived the U.S. economy far more than the New Deal programs did. The unprecedented industrial production of ships, tanks, planes, guns, and ammunition reshaped relationships between government and business. The character of the U.S. economic system actually changed through World War II. The war brought a new age of big business, this time closely tied to the military branch of the federal government. Following World War II corporate leaders and the military dominated national decision-making. National security interests would take precedence over domestic issues and the operation of the civilian branches of government. Leaders of industry and finance had gained a major position in guiding future U.S. political development.

Other social and economic changes occurred as well. Organized labor became a more established part of the U.S. economic system and society. No longer were unions primarily in the position of operating outside the establishment. Farmers saw prosperity once again, and major population shifts led to a growth of cities in the West and the South.

The political coalition of Southern Democrats and Republicans also grew stronger. Though progress still remained slow for inclusion of racial minorities and ethnic groups in U.S. society, some gains were made. Increased access to the military for blacks finally led President Harry Truman to sign an executive order in 1948 prohibiting racial segregation in the services. The presidency had also grown still more powerful.

Women also made gains outside the home. Not only were they filling the more traditional secretarial and clerical positions in greater numbers, but nontraditional physical labor and professional jobs also opened up. This expansion of women’s role in the workplace was particularly significant by 1943, when labor shortages among the traditional workforce began appearing. Much of the gains, however, evaporated at the conclusion of the war as men returned home, and both men and women returned in large part to their more traditional pre-war roles in society. Women would again be faced with workplace discrimination for the remainder of the century, though more and more career opportunities would open up for women throughout the rest of the century.

Reconversion of Industry and the Postwar Economy

The alliance between business and the military wanted to ensure there was not a postwar revival of New Deal programs as production of civilian goods resumed. The continued hostility of business and the military to government civilian planning desires would block any efforts to stabilize prices and coordinate industrial reconversion following the war. As the war neared an end, however, the public was anxious over whether the U.S. economy would return to an economic depression.

The government had attempted postwar planning in a way New Dealers believed business would find acceptable. Reconversion planning by the War Production Board (WPB) began in early 1943 under the leadership of Donald Nelson, a former Sears-Roebuck executive. Even he ran into corporate opposition to the WPB plan announced in November 1943. The reconversion plan called for smaller businesses to resume civilian production first as the larger corporations continued to complete their defense contracts. Business leaders, however, strongly opposed the plan. The large war contractors argued that small businesses would be given an unfair advantage in the postwar economy. They insisted that all U.S. businesses should reconvert simultaneously. The plan was killed. Meanwhile, the federal government established the Office of War Mobilization and Reconversion to assist industries in clearing manufacturing plants of war materials and to retool industrial facilities for the anticipated postwar economic boom.

In an effort to establish postwar economic stability on their own terms, business leaders formed the Committee for Economic Development (CED) in 1943. Congress began looking into the potential problem as well, but the CED largely won out favoring corporate oversight rather than government oversight. The CED sought a stabilized economy so as to avoid any need for further government intervention. The CED constituted a corporate brain trust.

Rise of the Military-Industrial Complex

The Cold War, in which the United States and Russia became two large superpowers, antagonistic with each other, provided the opportunity for the corporate-military alliance to continue through the next several decades. The military had gained substantial political strength at the expense of the civilian branches of government during World War II. This shift in power was largely due to business hostility to the New Deal that extended into the 1940s. As a result, national security replaced New Deal reform as the lead goal of the federal government.

Following the war business leaders realized they could neither go back to the laissez-faire, or minimum government regulation, policies of the 1920s that existed prior to the New Deal nor would they accept the Keynesian economic system—government big spending and oversight—practiced under the New Deal. They therefore sought to establish a new order to U.S. economics, a corporate internationalism built on international trade in conjunction with a strong military. The rise of the United States as both a world economic and military power corresponded with the collapse of European prestige. Business leaders would have a strong role in shaping U.S. domestic and foreign policy in the position of a new world superpower.

To maintain a strong economy following the end of the war, without relying on massive government assistance programs, international corporations sought to improve foreign markets for U.S. goods by rebuilding the European economies. Europe, they believed, would provide the outlet for the new U.S. surplus as full production continued following the war. The military also saw this business approach as beneficial because the foreign political systems would become stabilized. They would be less vulnerable to the rising Soviet communist influence. The resulting strategy for rebuilding Europe came in the 1947, European Recovery Program, better known as the Marshall Plan after Secretary of State George C. Marshall. The CED was one of the promoters of the Marshall Plan. In addition Congress passed the National Security Act of 1947, establishing national security as a key purpose for the postwar federal government. Industry leaders pressed President Truman to pursue a quick demobilization process so that companies would be as ready as possible for the expected economic boom.

The United States, through the Marshall Plan, provided $13 billion in economic aid to 17 European nations between 1948 and 1951. The plan proved a success as European economic productivity rose and various industries recovered rapidly.

Economic support also arrived with the emphasis to remobilize the military in response to the perceived growing Soviet threat. This military buildup increased with the onset of the Korean War (1950-1953). Following the Korean War the United States maintained military spending at unprecedented levels for peacetime. The business community knew that a strong military could keep access open to foreign markets.

The postwar economic boom did arrive as people bought consumer goods that were not available during the war using savings they had accumulated. The remobilization of the military to fight the spread of communism countered the usual major economic downturns that follow a boom. The government funded industry again for war materials. Through this process of integrating international trade with military strength, the national and economic security became interwoven. The Soviet threat provided the reason for keeping the new economic and military system together.

Notable People

James Forrestal (1892-1949)

Born in Matteawan, New York, Forrestal attended Dartmouth College and Princeton University before joining a Wall Street investment firm. After serving in naval aviation in World War I, Forrestal returned to employment in a New York City investment firm, becoming its president by 1938. As war mobilization gained momentum in 1940, many business leaders were consulted on how it should best proceed. As part of this approach in June 1940 President Roosevelt named Forrestal an administrative assistant. Two months later he became undersecretary of the navy. In that post, Forrestal was responsible for preparing the navy for war on two oceans including encouraging major industrial expansion. As a key part of this effort, he guided a massive expansion of the navy and navy procurement programs. To do this Forrestal created the Office of Procurement and Material in January 1942 to oversee mobilization and coordinate with other military services. In May 1944 Forrestal became secretary of the navy replacing Frank Knox who died in office. Following World War II a new presidential cabinet position was established, the secretary of defense. This new position was created to prepare the military services to act as a post-war superpower. In September 1947 Forrestal became the first to fill that position and reorganize armed services. There he greatly influenced the developing character of the Cold War.

Leon Henderson (1895-1986)

Born in Millville, New Jersey, Henderson would become a highly influential New Deal economist. After serving in the army in World War I, he graduated from Swarthmore College in 1920 with a degree in economics. Henderson then attended graduate school at the University of Pennsylvania between 1920 and 1922 where he was also an instructor in the Wharton business school at the university. From there he held various academic and government positions through the 1920s. Joining the New Deal in 1934 Henderson became director of the National Recovery Administration’s (NRA) Research and Planning Division where he rose in prominence. Though intimately involved in the development of industrial codes under the NRA, he quickly became convinced that the codes were causing more problems than they were solving. Henderson clearly opposed trends in which the economy was becoming increasingly concentrated in the larger companies at the expense of small businesses. Henderson therefore argued for a basic shift in New Deal policy. Rather than pursuing a national planning approach by regulating businesses, he wanted to expand business competition and increase government spending to stimulate the economy.

During the presidential election year of 1936 Henderson became an economic advisor to the Democratic National Committee as well as economic advisor to Harry Hopkins, head of the Works Progress Administration (WPA). In 1938 Henderson became head of the Temporary National Economic Committee (TNEC) where he continued opposition to big business and favored competition. Congress established the committee to investigate anti-trust enforcement. The committee lasted from late 1938 to early 1941. In 1939 he became a commissioner on the Securities and Exchange Commission (SEC) overseeing stock market activities.

With increasing needs to mobilize the nation’s economy in preparation for war, Henderson played a key role for President Roosevelt. In May 1940 Roosevelt established the National Defense Advisory Commission (NDAC) with Henderson as a member. In 1941 Henderson became head of the Office of Price Administration and Civilian Supply (OPACS) and then a member of the War Production Board (WPB) in 1942. Henderson had been a major promoter of rapid mobilization, price controls on goods, and rationing. In pressing hard for these goals Henderson became highly unpopular among business leaders. He resigned later in 1942 to help relieve tensions between the administration and business. After leaving public service Henderson became president of the International Hudson Corporation and remained active in various political organizations.

Robert Patterson (1891-1952)

Born in Glens Falls, New York, Patterson’s father was a lawyer. Following his father’s footsteps Patterson studied law at Harvard. Upon graduation he joined the prestigious law firm headed by Elihu Root. Root had been secretary of war and secretary of state in the President William McKinley (served 1897-1901) and Theodore Roosevelt (served 1901-1909) administrations. Influenced by Root, Patterson became a strong supporter for national defense. Enlisting in the New York National Guard Patterson was part of the U.S. expeditionary force sent to fight Pancho Villa on the Mexican border in 1916. Upon the U.S. entrance into World War I he joined the U.S. Army and became a second lieutenant serving in France. Following the war Patterson returned to New York where he established a successful new law firm through the economic boom years of the 1920s. Patterson’s time for public service came in 1930 when President Herbert Hoover (served 1929-1933) appointed Patterson judge to the U.S. District Court of southern New York. In 1939 President Roosevelt appointed Patterson to the U.S. Court of Appeals.

With the onset of war mobilization Patterson resigned his appointment to the bench and joined the War Department as assistant secretary of war under Secretary Henry Stimson. With both he and Stimson being Harvard graduates and Republicans and both having served in World War I in the same Army division in France, they formed a close working relationship in opposing isolationism. Soon Patterson was elevated to undersecretary of war, a position he held the remainder of World War II. From that position Patterson with Stimson’s support headed the army’s multibillion-dollar procurement program, a highly important position during mobilization. Patterson believed, for the sake of efficiency, that military contracts should predominately go to major corporations. As a result Patterson was instrumental in forging a strong relationship between the military and industry that would last for the remainder of the twentieth century. Though Patterson staunchly opposed any New Dealer efforts toward seeking social reform through war mobilization programs, he also opposed racial segregation in the military services. Patterson also argued for the military services to be joined into one department. Such massive reorganization would eventually arrive with creation of the Department of Defense in 1947. In that year Patterson resigned from public service and returned to private law practice. He was killed in a commercial airliner crash only a few years later in 1952.

Henry Stimson (1867-1950)

Stimson was born in New York City to a successful stockbroker. After graduating from Harvard Law School Stimson joined a New York law firm headed by Elihu Root who was to later become a U.S. secretary of war and secretary of state in the President William McKinley and Theodore Roosevelt administrations. In addition to his successful private law practice, Stimson became active in Republican Party politics. In 1906 President Theodore Roosevelt appointed Stimson U.S. attorney for the Southern District of New York where he tackled anti-trust cases. In 1911 President William H. Taft appointed him secretary of war. Then with the U.S. entrance into World War I, at 49 years of age, Stimson joined the Army and served as an artillery officer in France. Following the war Stimson returned to private law practice as a corporate lawyer on Wall Street. Then public service called again. President Calvin Coolidge (served 1923-1929) appointed him as diplomat to Nicaragua in 1927 and then to the Philippines in 1928. In 1929 President Herbert Hoover appointed Stimson as secretary of state.

With the Democrats returning to the White House in 1933, Stimson returned to private practice until 1940. In that year with another war looming, President Roosevelt appointed him to the crucial position of secretary of war. Roosevelt believed Stimson would be a great help in convincing the public to support war mobilization. Stimson also became a key supporter of Roosevelt’s lend-lease aid to Britain. Stimson assembled a key team to guide the nation in mobilizing for war. Stimson, however, was also a key supporter of Japanese internment and maintaining strict racial segregation of the armed forces. Another one of Stimson’s responsibilities was oversight of the top secret Manhattan Project charged with developing an atomic bomb. Stimson proved a major promoter of internationalist approaches to global issues that would greatly influence U.S. policies in future years.

Primary Sources

America Faces the Axis Powers

Following his unprecedented reelection to a third consecutive term of office, President Roosevelt delivered a crucial Fireside Chat to the American people on December 29, 1940. In this message he described more specifically than ever the dangers he saw developing in the world. Roosevelt described America’s need to begin producing arms for Great Britain as that country fought against intense aerial attacks by Germany (from Roosevelt, Franklin D. The Public Papers and Addresses of Franklin D. Roosevelt, 1938-1950).

Tonight, in the presence of a world crisis, my mind goes back eight years to a night in the midst of a domestic crisis. It was a time when the wheels of American industry were grinding to a full stop, when the whole banking system of our country had ceased to function …

Tonight … this new crisis … faces America …

The Nazi masters of Germany have made it clear that they intend not only to dominate all life and thought in their own country, but also to enslave the whole of Europe, and then to use the resources of Europe to dominate the rest of the world …

Some of our people like to believe that wars in Europe and in Asia are of no concern to us. But it is a matter of most vial concern to us that European and Asiatic war-makers should not gain control of the oceans which lead to this hemisphere …

If Great Britain goes down, the Axis powers will control the continents of Europe, Asia, Africa, Australasia, and the high seas-and they will be in a position to bring enormous military and naval resources against this hemisphere. It is no exaggeration to say that all of us, in all the Americas, would be living at the point of a gun—a gun loaded with explosive bullets, economic as well as military …

Frankly and definitely there is danger ahead—danger against which we must prepare. But we will know that we cannot escape danger, or the fear of danger, by crawling into bed and pulling the covers over our heads …

The experience of the past two years has proven beyond doubt that no nation can appease the Nazis. No man can tame a tiger into a kitten by stroking it. There can be no appeasement with ruthlessness. There can be no reasoning with an incendiary bomb. We know now that a nation can have peace with the Nazis only at the price of total surrender.

The American appeasers ignore the warning to be found in the fate of Austria, Czechoslovakia, Poland, Norway, Belgium, the Netherlands, Denmark, and France. They tell you that the Axis powers are going to win anyway; that all this bloodshed in the world could be saved; that the United States might just as well throw its influence into the scale of a dictated peace, and get the best out of it that we can …

The British people and their allies today are conducting an active war against this unholy alliance. Our won future security is greatly dependent on the outcome of that fight. Our ability to “keep out of war” is going to be affected by that outcome.

Thinking in terms of today and tomorrow, I make the direct statement to the American people that there is far less chance of the United States getting into war, if we do all we can now to support the nations defending themselves against attack by the Axis than if we acquiesce in their defeat, submit tamely to an Axis victory, and wait our turn to be the object of attack in another war later on …

The people of Europe who are defending themselves do not ask us to do their fighting. They ask us for the implements of war, the planes, the tanks, the guns, and the freighters, which will enable them to fight for their liberty and for our security. Emphatically we must get these weapons to them in sufficient volume and quickly enough, so that we and our children will be saved the agony and suffering of war which others have had to endure …

In a military sense Great Britain and the British Empire are today the spearhead of resistance to world conquest. They are putting up a fight which will live forever in the story of human gallantry …

Our national policy is not directed toward war. Its sole purpose is to keep war away from our country and our people …

The worker possesses the same human dignity and is entitled to the same security of position as the engineer or the manager or the owner. For the workers provide the human power that turns out the destroyers, the airplanes, and the tanks …

Nine days ago I announced the setting up of a more effective organization to direct our gigantic efforts to increase the production of munitions. The appropriation of vast sums of money and a well-coordinated executive direction of our defense efforts are not in themselves enough. Guns, planes, ships, and many other things have to be built in the factories and arsenals of America …

American industrial genius, unmatched throughout the world in the solution of production problems, has been called upon to bring its resources and its talents into action. Manufacturers of watches, farm implements, linotypes, cash registers, automobiles, sewing machines, lawn mowers and locomotives are now making fuses, bomb packing crates, telescope mounts, shells, pistols, and tanks.

But all our present efforts are not enough. We must have more ships, more guns, more planes—more of everything. This can only be accomplished if we discard the notion of “business as usual.” This job cannot be done merely by superimposing on the existing productive facilities the added requirements of the nation for defense …

We must be the great arsenal of democracy.

I have the profound conviction that the American people are now determined to put forth a mightier effort than they have ever yet made to increase our production of all the implements of defense, to meet the threat to our democratic faith.

News of the Attack on Pearl Harbor Reaches FDR

Grace Tully, President Roosevelt’s secretary, recounts the demeanor of the president as he dictates his speech to be given to Congress the next day (quoted in Colbert, Eyewitness to America, pp. 466-467).

Shortly before 5 o’clock the Boss called me to his study. He was alone, seated before his desk on which were two or three neat piles of notes containing the information of the past two hours. The telephone was close by his hand. He was wearing a gray sack jacket and was lighting a cigarette as I entered the room. He took a deep drag and addressed me calmly:

“Sit down, Grace. I’m going before Congress tomorrow. I’d like to dictate my message. It will be short.”

I sat down without a word; it was no time for words other than those to become part of the war effort.

Once more he inhaled deeply, then he began in the same calm tone in which he dictated his mail. Only his diction was a little different as he spoke each word incisively and slowly, carefully specifying each punctuation mark and paragraph.

“Yesterday comma December 7 comma 1941 dash a day which will live in infamy dash the United States of America was suddenly and deliberately attacked by naval and air forces of the Empire of Japan period paragraph.”

The entire message ran under 500 words, a cold-blooded indictment of Japanese treachery and aggression, delivered to me without hesitation, interruption or second thoughts.

Suggested Research Topics

  1. Identify the types of industries most affected by World War II mobilization including those that saw much more work and those that declined.
  2. Mobilization led to major geographic shifts in the population, even the creation of whole new communities where new industries were established. What were these shifts and which segments of society were most involved?
  3. Explore the problems that some segments of society experienced in attempting to enjoy the new economic benefits of expanded war production.
  4. Explore some of the stories written by women employed in the war industry. What were some their experiences in entering what was largely a male domain previously? What happened once the war ended?