Destructive Creation. Mark R. Wilson
spend a year or two studying the problems associated with economic mobilization. Between 1924 and 1940, nearly nine hundred officers graduated from the AIC. Of these, more than a hundred also received MBAs from Harvard Business School, under a new program created by Harvard and the War Department. Meanwhile, the Ordnance Department, operating through the regional procurement districts that it had set up during the Great War, continued to work with companies and business associations. During the 1920s, the Ordnance Districts conducted surveys of thousands of manufacturing plants that might be tapped for munitions production in a future war.122
Army officers attached to the OASW, including Major Dwight D. Eisenhower, also helped compose the official Industrial Mobilization Plan (IMP). First released in 1930, and revised several times before World War II, the IMP was shaped by the ideas of former WIB chief Bernard Baruch, who frequently advised the military. The plan called for WIB-style civilian coordinating agencies, which would allocate critical materials and impose price controls. According to Baruch, a future coordinating agency could combine strong “administrative control” with a voluntaristic approach to mobilization, in which industry could mostly organize itself. At least in its public statements, the War Department promised to rely heavily on voluntarism. According to the Army’s chief of staff, General Douglas MacArthur, any future industrial mobilization would depend on “spontaneous cooperation,” not coercion. “The least possible disturbance must be caused in the normal economic life of the country,” MacArthur promised Congress in 1931. This attitude was written into the IMP, which stated that future mobilizers must avoid imposing “arbitrary and unnecessary regulations” on businesses and consumers. “No radical changes in normal economic relationships between individuals and between an individual and Government should be instituted,” the IMP declared.123
The War Department, like the Navy Department, rejected the Nye Committee’s calls for a full nationalization. This was not because Army officers had no interest in manufacturing weapons: by the mid-1930s, they were using their own arsenals to supply almost all the peacetime Army’s needs for rifles, ammunition, artillery, projectiles, and gunpowder. But because they expected these GOGO facilities to supply only about 10 percent of their needs in a future all-out war, Ordnance Department officers wanted to cultivate relationships with private companies. Their counterparts in the Army Air Corps, who procured planes by ordering from a highly competitive private industry, also opposed nationalization. Just as their predecessors had done during the Great War, these interwar officers believed that it would be much cheaper and easier, economically and politically, to rely heavily on private capacity in a major emergency.124
On the eve of World War II, the War Department’s civilian leaders and regular officers emphasized their friendliness to the private sector. As conditions in Europe deteriorated, Assistant Secretary of War Louis A. Johnson promised executives that the military officers who would participate in any future industrial mobilization “have no designs to take over your business.” Rather, Johnson promised business leaders, “[w]e have predicated our whole industrial mobilization program on the maintenance of the established American way of getting things done.”125 Among the military officers charged with planning procurement, including those attached to the AIC, there was a similar doctrine. “We are attempting to solve our industrial mobilization problems not by regimentation,” one AIC pamphlet of 1938 stated, “but in accordance with democratic American methods.” In May 1940, as France fell, the college’s commandant, Colonel F. H. Miles, promised the Buffalo Chamber of Commerce that the military’s intention was “to disrupt industry as little as possible.”126
Given the record of the War Department in the 1920s and the 1930s, it may be hard not to conclude that the U.S. Army, if not the Navy, was overwhelmingly deferential to the private sector. Yet the attitude of War Department officers was actually not quite as reassuring to pro-business conservatives as it might appear at first glance.127
For one thing, military officers maintained pride in their own competence. With good reason, many of them resented Baruch’s self-promoting accounts of the Great War mobilization, which exaggerated the influence of the WIB while downplaying the major contributions of the War and Navy Departments and their supply bureaus. The AIC was not intended to simply put the military in a position to tap private expertise but also to develop in-house competencies in wartime economic management. Assistant Secretary of War Dwight F. Davis made this point in 1924, as the AIC opened. “The theory so often advanced … that we can quickly settle our supply problems by calling in from the industrial world men of high standing, in my judgment, is not sound,” Davis said. Instead, the military needed to “know more about its work than any body else.” This attitude endured, despite the War Department’s many public promises to defer to industry. As Lieutenant Colonel A. B. Quinton, Jr., an AIC instructor, put it in 1937, “we should not have any inferiority complex in dealing with” business leaders.128 Such language was significant because it shaped the attitudes of men who would wield great economic power on the World War II home front. Quinton, for example, would serve as one of the nation’s top managers of the American war economy, as chief of the Ordnance Department’s biggest contracting office, in Detroit.
Quinton and his fellow officers believed that the contractors should be subject to special forms of economic regulation, which might include price and profit controls, as well as compulsory orders. As one AIC study group concluded in 1937, even if the War Department did not favor increased nationalization, it did agree with the widespread public calls for “rigid control of the private munitions industry.” Top military procurement officers, like many other Americans, wanted to limit war profits but without completely abandoning the profit system. As Colonel Charles Harris told Congress, more than a little awkwardly, in 1937, “it is the idea to disturb the normal process as little as possible…. On the other hand, the War Department is strongly opposed to profiteering…. On the other hand, the War Department believes in a fair profit.” Two years later, Colonel James H. Burns promised the Chamber of Commerce that the military wanted to minimize any economic “regimentation” in wartime. Echoing the rhetoric of Herbert Hoover and other conservatives, this was music to the ears of most business leaders. Somewhat less reassuring, perhaps, was Burns’s added qualification: “if we permit unreasonable prices and profits we … ruin the morale of the country.”129
Business leaders also had reason to be concerned about the military’s reliance on Baruch’s vision of industrial mobilization, which was less voluntaristic than it seemed. As Baruch reminded the cadets at the U.S. Military Academy at West Point in 1929, the wartime state would have the power to allocate critical materials. This was “the iron fist in the velvet glove” that the government could wield to encourage private firms to do its bidding.130 This attitude worried business leaders, as did Baruch’s notion that as a last resort, the government could always just commandeer private property. As Baruch reported to a friend in 1924, executives such as Elbert Gary of U.S. Steel had insisted that “the taking over of industries was a communistic scheme” that should not be allowed even in wartime.131 On this question, military officers sided not with Gary but with Baruch. During the 1930s, top War Department officers often noted that the IMP and other emergency schemes would provide ample coercive powers. Some of them echoed Baruch’s “iron hand in the velvet glove” rhetoric; others described a “big stick available for use on the recalcitrant if necessary.” For the officers, the wartime state’s coercive powers were “like a policeman’s club—always in sight but little used.”132 From the point of view of many business leaders, this was disturbing. It remained unclear who might be using the club, for what purposes it might be used, and who might be on the receiving end.
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In the late 1930s, as international skies darkened, many Americans grew pessimistic about the future of domestic politics. Progressives worried that war mobilization might lead to American fascism. In 1939, Interior Secretary Harold L. Ickes warned that conservatives might use the war emergency to “destroy both American democracy and the social reforms of the New Deal.”133 Such fears reflected the political defeats suffered by New Dealers over the previous two years. Despite an overwhelming victory in the 1936 elections, President Roosevelt had struggled to expand the New Deal.134 His early 1937 effort to add justices to the Supreme Court bolstered conservative