Destructive Creation. Mark R. Wilson
in Cleveland that saw at least $1 million in new investment in buildings and equipment during the war years. Several midsize independent companies in Cleveland, including Jack & Heintz, Thompson Products, Cleveland Pneumatic Tool, Ohio Crankshaft, and Cleveland Graphite Bronze, were important suppliers of aircraft components. These items included engine valves, crankshafts, bearings, and cylinder heads, as well as landing gear struts. Each company ran plants built or overhauled with $8 million to $32 million of government money.115
The situation in Cleveland was somewhat unusual because that city was home to a large number of midsize independent manufacturers. However, there were comparable patterns in other localities, including Chicago, Milwaukee, and Los Angeles. Especially in these places, but also across the nation, the war economy had expanded enough by 1942–43 to directly engage all sorts of manufacturers, large and small. Hundreds of smaller, privately held firms held significant prime contracts and ran plants built with large sums of government money. Thousands more participated as subcontractors. Far from being monopolized by the largest corporations, the business of war was distributed broadly and deeply.
The local-level data from places like Cleveland merit close attention because they suggest something important about the organization of the American war economy. As the government’s micro-level records of prime military contracts demonstrate, many components that went into the larger finished weapons, such as ships and planes, were supplied directly by the military bureaus, as “government-furnished equipment” (GFE). The War and Navy Departments contracted directly with the manufacturers of many key components, including aircraft parts, avionics instruments, landing gear, fire control systems for shipboard guns, and hundreds of other items. In many cases, these goods were made in plants paid for directly by the military or the DPC.
All this public involvement reduced the responsibilities of the contractors. GFE, ordered by the military and delivered to the prime contractors’ plants, accounted for about a third of the dollar value of World War II aircraft, including the B-29.116 To be sure, the prime contractors were extraordinarily busy with their own production and subcontracting; they were also responsible for installing much of the GFE. However, a war economy in which so much GFE was used was necessarily one in which the War and Navy Departments had a great deal of responsibility over project management. It required military agencies to deal directly with hundreds of smaller firms, as plant financier and buyer. They also used their power and knowledge of national supply networks to help contractors troubleshoot bottlenecks and other production problems.117 So despite the large orders that they placed with the biggest prime contractors and GOCO plant operators, the War and Navy Departments were far from content to sit back and let a handful of big businesses meet their needs. Instead, they developed huge procurement organizations that dealt face-to-face with thousands of suppliers, large and small.
As the record of prime contracting and the extensive use of GFE suggests, military officers served during World War II as the national managers of weapons production projects. Some of them were based at the AAF’s Materiel Command, at Wright Field in Ohio. Thanks to New Deal public works outlays, Wright Field at the end of the 1930s was already a significant research and testing facility, boasting the world’s largest wind tunnel and its most sophisticated propeller-testing equipment.118 During World War II, Wright Field expanded into an immense engineering and procurement organization. (The AAF’s Materiel Command, like the Army’s Ordnance Department, had tens of thousands of employees, which made them far larger than the WPB.) Wright Field’s Production Division, led by Major (later General) Kenneth B. Wolfe, became well known among aircraft industry contractors for its aggressive demands for quick design changes and faster output.119 Wright Field served as the primary public authority over contracting, design specifications, testing, and inspection. It also interfaced with contractors to facilitate group projects. Early in the war, for instance, Wolfe and his team coordinated the expanded B-17 bomber program, which required Douglas and Vega-Lockheed to rearrange their California plants to make thousands of the Boeing-designed planes.120
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As the record of U.S. industrial mobilization from 1938 to 1944 suggests, the American war economy was complicated enough to provide plenty of evidence for any number of stories about its workings. Probably the most common shorthand account, at the time and afterward, emphasized the role of the nation’s leading industrial corporations, such as GM and GE. Because executives from several of the big corporations became top mobilization officials in Washington, they invited close scrutiny. However, the focus on the biggest businesses and their leaders has made it difficult to generate an accurate picture of the whole American war economy.
The largest industrial corporations were indeed important, but not until the middle phase of the mobilization, in 1940–42, when the government commissioned dozens of new GOCO plants. That new capacity was built atop an already substantial military-industrial base, which had been created in 1938–40, when increased Allied orders and direct plant investments boosted the operations of warship and aircraft manufacturers. Although those military contractors would become giant enterprises in wartime, before 1940 most of them qualified as midsize specialty manufacturers in competitive fields.
Even after Pearl Harbor, there was not much of the so-called monopoly capitalism that progressive critics of the U.S. war economy have long decried. In most of the major war industries, including airframes, ships, tanks, trucks, ordnance, and electronics, there were at least a dozen major prime contractors. And as the record of the expanded war economy of 1942–44 suggests, plenty of formerly small or midsize companies—not just the largest corporations—became important subcontractors and prime contractors.
A close look at the workings of the arsenal of democracy also suggests the complexity of government-business relations. As we might expect, given the structure of the American economy, the wartime state was extraordinarily dependent on the managerial and manufacturing expertise of private firms. Only in warship construction, in which the Navy itself managed large production facilities, did the public sector obviously hold the capacity to make a large fraction of the weapons required in wartime. (Even there, the critical job of building the propulsion systems was handled by private firms, including GE and Westinghouse.) Otherwise, even when the government built giant new facilities that it owned completely, it turned to for-profit companies to manage production and personnel. In theory, the Navy and War Departments and the USMC might have drafted enough engineers and prospective managers to staff most of the new government-owned plants with public employees. In practice, military and civilian officials chose an easier path, which was to give private firms the job of managing most of the war economy.
Despite its obvious dependence on private expertise, the American industrial mobilization also relied heavily on energetic public entities. The public contribution was perhaps most obvious in plant finance. Even during the rearmament phase of 1938–40, British and French government orders and direct investments, along with some from the United States, underwrote the expansion of the aircraft industry. The predominance of GOCO plant, paid for with public dollars via the DPC and the War and Navy Departments, was an even more obvious manifestation of the critical role of government. The work of civilian-led coordinating boards such as the WPB (see Chapter 4) helped the war economy avoid devolving into a chaotic scramble for scarce materials. Less obvious, but no less critical, was the economic work of the War and Navy Departments. The military bureaus contributed a great deal to weapons design. Perhaps most important, they were the top awarders and managers of contracts. They also helped build and coordinate supply chains, promoted the sharing of information among suppliers, and provided many prime contractors with huge amounts of GFE. Because the military and the public understood the military’s core mission as fighting in combat theaters, its work on the home front was seldom fully appreciated. But the military’s business divisions, together with a variety of civilian authorities, made the war economy work.
It may seem too obvious to point out that the dynamics of the American war economy were too complex to sum up in a few words. But we need to appreciate its complexity in order to evaluate the business community’s efforts to influence public understanding of the subject. During World War II, these efforts took the form of a multimedia public-relations campaign, designed to highlight the private sector’s leadership of