Freedom's Forge (40 page)

And Americans, by and large, accepted what might be termed the generosity of selfishness. “The public believes in the profit system,” asserted J. B. Hartley, director of the National Association of Manufacturers, and “they do not believe in war” as a substitute.
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This offended those who believed that war without self-sacrifice lacked a certain moral standing. What they couldn’t change, however, was their reliance on a collaboration between businesses large and small forged years before by the free market, a system so complex and so constantly changing that no government agency could ever have devised a system to supervise—let alone plan out—the result.

When, for example, General Motors subcontractor Yellow Truck and Coach Company was under contract to the Timken–Detroit Axle Company, at the same time Timken was under contract to Yellow, because Yellow also made an essential component that Timken needed to make the axles it sent back to Yellow to make the wheel assemblies, which it then forwarded on to a General Motors plant to complete a military truck. When these interrelationships were multiplied by a thousand, and then ten thousand, it was hard to see how any top-down command system could have kept effective track of all the moving parts.
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Nor was it entirely a coincidence that no other wartime economy depended more on free enterprise incentives than America’s, and that none produced more of everything in quality and quantity, both in military and civilian goods.

The process kicked off even before the war began in the spring of 1941, when a magazine such as
Business Week
began running stories on how to snag defense contracts by conversion to wartime production. It offered advice in answer to queries like “I would like to sell some shovels to the Army, but its purchases run to much larger quantities than I can handle,” or “We have a canning plant which will probably be idle and could be used for war contracts. Can you tell us how to contact the proper parties?”
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There was advice on where to write in order to get government loans to help with conversion: the RFC or the Defense Contracts Division of OPM. In addition, it said, the Army and Navy both made advances of up to 30 percent for prime contractors.
Business Week
also offered free advice on what materials to use as substitutes for those too hard to get for civilian production: plastic for aluminum film spools, say, or cast iron for brass bicycle locks. Human ingenuity could solve problems that government planning or rationing could not.

When war came, the scramble for defense contracts produced an extraordinary book published by the Research Institute of America, called
Your Business Goes to War
.
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Page by page it told firms whom to contact for getting a government contract and how to draft one up. It explained where and how to get critical materials, how to work with the priority system, and how to deal with labor under the new wartime
laws such as the rules concerning overtime. It offered several pages of suggestions on what products a company could offer to make. (See
Appendix B
)

If, for example, you made vacuum cleaners, there might be a place for you manufacturing gas-mask parts. A razor manufacturer might want to look into percussion primers for artillery shells; an office furniture company, into making bomb containers. A shoe company could make helmet linings; a maker of bottle caps and bottlers could turn out .50-caliber tripod mounts; while a lawn mower company might offer to machine shrapnel.
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Other companies have already done it, was the message. You can do it, too. “There is an alternative,” its author added in the preface. “It is the shouted order, the broadcast ultimatum, the decision made by an unchallengeable Führer” in which “the executive becomes a clerk in the national warehouse.” No one wanted that. But there was also another implicit message: Those companies who adapt to the new wartime conditions will survive and even thrive. Those who do not will not.

To that degree, wartime conditions reproduced important features of peacetime market conditions. The Army and Navy were like classic customers: demanding, even finicky, and reluctant to pay except for exceptional service. Contracts flowed to those who could produce at the most competitive rate—and after 1943 both services could force producers to renegotiate contracts if they thought the profits or costs excessive.
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There were no favored state industries as in Nazi Germany or Japan. No state subsidy was on hand to save the incompetent or underperformer. But on the other hand, a raft of timely government loans could leapfrog a newcomer over his staid competitors. In wartime as in peacetime, entrepreneurs challenged the old established firms, as Henry Kaiser and a dozen others proved. The small and nimble rose up to compete with the large and slow-moving.

This rule didn’t just apply to existing business. The war produced more than half a million
new
businesses, which became the hinge of change from the prewar to the postwar economy.
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There was, for example, Frank Hobbs and his partner George Comstock. Hobbs had grown up in California before moving to Portland, Oregon, to open his own Firestone tire dealership when he was barely
out of his teens. Then, in the teeth of the Depression, Hobbs launched his own company to produce Masonite wallboard using superhard paint finishes as a substitute for more expensive tile. Soon he had perfected a process and substance he called Colotyle. It became a low-cost alternative to tile in kitchens and bathrooms up and down the West Coast. Henry Kaiser even used it for the heads in his Liberty ships.

The coming of war was for Hobbs just another business opportunity. In the spring of 1942, someone showed him the bulky, steel-ribbed shelters the Army was shipping out from Quonset, Rhode Island, for troops who would have to serve in the frozen wastes of Alaska. Hobbs was shocked. The huts were not only awkward and heavy to ship, but wasted that all-important critical wartime material, steel. He and his business partner George Comstock came up with the idea of a lightweight version made of hard-coated wood—a sturdy plywood igloo. Three weeks later they showed a model to the Army Corps of Engineers, Seattle District, who immediately ordered eighty-five more test huts. In no time Pacific Huts, with Hobbs as president and Comstock as vice president, had a contract for one thousand.
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What they needed now was a factory. They found it in a run-down industrial area just half a mile from Boeing’s Seattle plant, at 6901 Fox Avenue South. They raised $100,000 from local bankers and in sixty days converted the old shipyard into an assembly line for making their huts. Five hundred employees built the sixteen-by-thirty-foot hut using Masonite, spruce or hemlock ribs, and plywood floors, complete with electrical wiring. Each was tall enough (nine feet at the center) for a man to stand in, and each could be assembled by five soldiers in eight hours.

Soon Hobbs’s employees were turning out a completed hut every fifteen minutes and packing them up for shipment. In September 1943, Hobbs ran an ad in Seattle newspapers boasting of how his huts were two months ahead of schedule, thanks to employees’ suggestions on how to boost production. The ads showed the names and faces of twenty-seven employees who had streamlined the process—each of whom also received a war bond as a reward.

Hobbs’s Fox Avenue factory turned out more than 12,000 Pacific huts before the war ended. In Alaska thousands were left where they
were erected when the Army withdrew. For four decades they stood forgotten and abandoned through snow, rain, and ice storms. Then in the 1990s the Pentagon sent out their Defense Environmental Restoration Program to survey the sites for demolition. They found that not only had Hobbs’s huts weathered the decades better than the steel Quonsets, but most of them were intact and still livable.
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Ted Nelson had been an eleven-dollar-a-day welder in the Mare Island Navy Yard in 1940 doing standard welding chores, including the ten thousand upright studs on an average-sized naval vessel. It was a laborious process, in which Nelson had to melt the proper amount of flux before setting each stud. He retreated to his garage and experimented with a device that would perform both tasks at once. He called it his “rocket gun,” and showed it to his amazed superiors. A fast welder working the old-fashioned way could do forty studs in an hour. Nelson’s rocket gun did one thousand in the exact the same time.

Tom Nelson began selling versions of his rocket guns out of his garage to shipyards for $500 each. Then, with $95,000 he borrowed from Jesse Jones and the RFC, he created the Nelson Specialty Welding Equipment Corporation and built a plant in a cornfield near San Leandro. By war’s end he was supplying his guns and other welding tools to more than one hundred shipyards up and down the West Coast, including the Kaiser yards at Richmond and Portland and the Bechtel-McCone yards at Calship.
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If businessmen like Hobbs and Nelson and Frank Ix and the managers of Manitowoc Shipbuilding were the living, beating heart of wartime production, its new workforce was the blood transfusion that kept it flowing and growing.

War production had triggered the greatest mass migration in American history.

At least 20 million Americans left their homes to find work in the new and old plants. At the end of the war, 15.3 million of them were living someplace other than where they were the day Pearl Harbor was bombed. As in the era of the covered wagons, Americans followed the call of opportunity—in this case opportunities created not by the birth
of a nation but by the rebirth of American industry. If business profits rose during the war, labor’s wages rose much more—an average of 70 percent.
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It was either a very happy or very complacent worker who wouldn’t get himself and his family on the road for wages like that.

At least seven million left America’s farms, especially in the South.
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Five and half million of those went to work in factories and cities; the rest went into the military. But instead of this being a disaster for the nation’s ability to feed itself, farm payrolls fell by only a million.
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Because if farmers were fewer on the ground, they were far from idle. They turned to mechanization and chemical fertilizers to make their acres more productive, so much so they also expanded pasturage for livestock by 22 percent. Some complained that Washington’s restrictions on manufacture of machinery like tractors and harvesters made conversion that much harder. Some lamented that the big farms were devouring the small inefficient ones as well as the abandoned homesteads.
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But it was this concentration and mechanization that made it possible for American farmers to feed not only their own country better than it had been fed before the Depression, but their Allies, as well. By the time the war was over, they were ready to feed a devastated Europe for almost five years. After that, they would go on to feed the world.
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The biggest beneficiaries of the demographic shift from country to city were African Americans. Almost one million left the old states of the Confederacy for points north and west.
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Another half million went into uniform.

Their passage into mainstream American life got an enormous boost on June 25, 1941, when Roosevelt issued an executive order calling for an end to employment discrimination based on race, color, or creed in the nation’s growing defense industries. The idea came from A. Philip Randolph, head of the powerful railway porters’ union, which he founded when no other union in the country would accept black railway workers. He had campaigned hard for the order with both the White House and Bill Knudsen as head of OPM.

Knudsen fully supported Randolph on desegregation. When the war effort truly hit its stride, he knew America’s factories were going to need those additional black workers. But Knudsen still felt the best way
to go about it was through “quiet work with the contractors and workers,” as he put it, rather than executive fiat. Once employers realized that hiring black workers would work, they would come around.
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Randolph, however, was adamant. Recognizing the Negroes’ equal right to work and serve in uniform, he wrote Knudsen, was partly what American democracy was all about. To Roosevelt he wrote a very different letter. He was prepared, he told the president on May 29, to mobilize “from ten to fifty thousand Negroes to march on Washington in the interest of securing jobs … in national defense” as well as integration in the armed forces.
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Roosevelt sensed a looming public relations disaster both for himself and for the Democratic Party, which was becoming increasingly successful in poaching black voters away from the Republicans, in spite of the Democrats’ record supporting segregation in the Deep South. The president tried to get his wife, Eleanor, an acknowledged civil rights champion, Mayor Fiorello La Guardia, and others to talk Randolph out of the march. Nothing could move the black union leader. So finally, facing the prospect of a flood of black protesters flooding the National Mall and surrounding the Lincoln Memorial, Roosevelt backed down. He issued Executive Order 8802 six days before the march was supposed to start. Randolph graciously canceled the day of protest.

To Randolph and others, it was a historic moment—and a foretaste of the civil rights struggle that was to come. The order, however, had its limits. The armed forces remained segregated right up to the war’s end. The committee FDR set up to oversee discrimination was likewise limited in its powers. Southern politicians closed it down as soon as the war ended. It’s not clear whether Knudsen’s approach might not have worked better.
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The results were certainly uneven. Henry Kaiser hired blacks in his shipyards, but few found jobs working on ships. Most did peripheral jobs, such as the road gang of blacks from Louisiana Clay Bedford employed for paving roads around and through the Richmond complex.
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Roy Grumman hired blacks and whites without discrimination, while Glenn Martin’s Baltimore plant continued to be segregated. So was the Bethlehem-Fairfield shipyard. General Motors’ Eastern Aircraft plant down the road, on the other hand, was not.