[War Production in 1942]
[From the U.S. Government Publishing Office, www.gpo.gov]

WAR PRODUCTION
IN 19^2
ISSUED BY THE DIVISION OF INFORMATION
WAR PRODUCTION BOARD
CONTENTS
Page
Part I—The First Year________________________ 3
Part n—The Major Problems-------------------- 6
Materials________________________________ 6
Steel________________________________ 6
Alloy Steels_________________________ 6
Copper_______________________________ 7
Zinc_________________________________ 7
Tin__________________________________ 7
Aluminum----------------------------- 8
Magnesium____________________________ 8
Lead_________________________________ 8
Miscellaneous________________________ 8
Rubber___________________________________ 8
Conservation of Materials________________ 9
Priorities and Allocation of Materials—	10
Conversion of Industry__________________ 12
Small Manufacturers_____________________ 13
Concentration of Industry_____________ 14
Construction and Facilities_____________ 15
Program Adjustments--------------------- 16
Labor’s Part____________________________ 16
Part HI—Organizational Developments-----	18
The American people are entitled to a report on the progress of production in our first year of war.
Today we are making as many combat weapons—tanks, planes, guns, ships—as the entire Axis. Today the United Nations together are turning out twice as many weapons as the enemy.
But we cannot win a war simply by equaling or even outproducing our enemies. We must have a smashing superiority and keep it that way to the end. And we must remember that we cannot win by production alone. Victory will be won on the fields of bloody battle—by our soldiers, sailors, and marines— the best and bravest fighting men in the world.
So I give you this solemn thought : The cost of keeping our freedom will be measured not in money, in time, or production, but in American lives. The boys who are fighting our battles will win more quickly and with less loss of life if the men on the production front give them every possible advantage in combat weapons—if we accept willingly and quickly the changes in our lives that make such production possibly. Keep this thought burning in your minds and hearts: That countless lives and untold suffering will be saved if extra effort at home brings victory just onelnonth closer.
The grimmest fighting and the hardest work lie ahead of us.
DONALD M. NELSON, Chairman, War Production Board,
RISE IN MUNITIONS PRODUCTION
War Output—1942
Airplanes_______________________________________________________________ 49,000
Tanks, and self-propelled artillery_____________________________________ 32,000
Anti-aircraft guns (20 mm. and over)____________________________________ 17,000
Merchant ships (deadweight tons)________________________________________ 8, 200,000
(Figures announced Dec. 7 by the Office of War Information)
War Finance (Cumulations are from June 1940)
Authorized war program as of Nov. 30,1941_____________________$64,000,000,000
Authorized war program as of Nov. 30,1942_____________________ 238,000,000,000
Expenditures as of Nov. 30, 1941______________________________ 13,800,000,000
Expenditures as of Nov. 30,1942_______________________________ 61,800,000,000
Daily rate of expenditure in November 1941____________________ 67,000,000
Daily rate of expenditure in November 1942____________________ 244,500,000
Manpower
War workers December 1941______________________________________ 6,900,000
War workers December 1942___________________________________—	17,500,000
GPO—War Board 2903—p. 2
= T H E FIRST YEAR
Friends and foes of the United States learned during the days and months of 1942 that President Roosevelt’s concept of America as the “Arsenal of Democracy” was being realized in cold steel.
In 1942 the United States transformed itself from the world’s greatest producer of peacetime goods to a producer of the machines and equipment of war at a rate unequaled by any other nation. At the end of the year the United States was producing shooting equipment at a rate more than four times faster than in November 1941.
The nation came into 1942—the year of crisis—carrying a substantial war program on top of the greatest volume of civilian production ever attained in one year. But at year’s end the civilian economy was getting little more than it needed to support the increasing weight of a prodigious war program.
In 1941 the United States boosted tank production from virtually zero to many hundreds a month, and at the same time produced 3,700,000 electric refrigerators. Some 50,000 machine guns were produced, as were more than 1,500,000 typewriters. Plane production of about 2,000 a month was achieved in the same year that saw production of an all-time high of 5,000,000 motor vehicles, decorated with chrome and stainless steel bright work. Millions of tons of steel went into bedsprings, farm machinery, eggbeaters, washing machines, school buildings, railroad locomotives, and hundreds of other civilian products, and there was enough steel besides to achieve production of 125,000 deadweight tons of maritime shipping in a single month.
America in 1941 loaded its industry with orders for civilian goods like a trader packing his willing beast of burden with a tremendous load of produce for a trip to a market thronged with eager buyers—not forgetting to Include in the bulging pack a few things he had promised to lend a friend in town.
Then the shock of Pearl Harbor. But even so, it wasn’t until a month later— January 6, 1942—when the President set production goals which startled the world, that the United States, like a sluggish champion prize fighter, fully realized it couldn’t do the job unless it got lean and tough and threw all its strength into the effort.
The Office of Production Management, designed to direct and control a defense production program, was abolished, and on January 16,1942, the War Production Board was established. Its chairman, Donald M. Nelson, was given supreme authority to assure “maximum production and procurement for war.”
As total appropriations for war purposes bounded from 60 billion dollars to 100 billion, 200 billion and 238 billion, the primary task of converting industry to war production was rushed. The pressure was on, and there was no time to lose. Singapore fell to the Japs and with it went the rubber source of a nation whose more than 30,000,000 cars and trucks rolled on rubber. With it, too, went the normal source of tin, cobalt, hemp and other materials.
While Americans fought and fell back and died on Wake Island, Bataan and Corregidor, Americans at home cried for production. Hitler was massing his power for a death blow at Russia. The Jap was striking toward Australia. The Him was pounding in the Near East. Many millions of human beings with all but hops beaten out of them prayed in occupied countries and in concentration camps for the roar of American bombers.
The pressure was on, and there was no time to lose. There was no time to plan a nicely balanced program. There was only time to start producing—right now, as fast as possible.
In early February the WPB issued an order which loosed the might of America’s greatest industry against Hitler: production of automobiles was stopped, and the industry which had produced 5,000,000 cars and trucks in a year set its manpower and inventive genius to work tooling up for tanks, planes, guns and other weapons. In quick succession came limitation orders to insure that steel, copper, aluminum and a score of other materials went into war goods, and that industry went to work producing them. Within a few months the great consumers durable goods industries were virtually shut down, as such, for the duration.
Contracts were fairly shovelled out by the government procurement agencies. Manufacturers, big and small, some with adaptable facilities and some with hope-I lessly un-needed facilities, sought war
work. There was no time to lose, and contracts went to those who could begin producing soonest with the least addition of new tools. Many manufacturers, especially smaller ones, couldn’t get war work. They pleaded for war work. Their facilities weren’t suited. Materials, becoming increasingly scarce, couldn’t be spared to them to produce their normal products. Some became “casualties on the home front.” There was no time to lose, no materials to waste.
The conversion phase unfolded. Manufacturers of women’s unmentionables were making mosquito netting; a haircurler producer was making clamps for airplane assemblies; a roller coaster maker had converted to production of loading hooks and bomber repair platforms; toy trains to bomb fuses, watches to fire control equipment, typewriters to machine guns, tombstones to armor plate.
Manufacturers who couldn’t make a war product separately pooled their resources and took a contract together. Most prime contractors let out subcontracts by the dozen, some by the hundred.
Altogether, about 70,000 prime contracts and 700,000 subcontracts were let during the year.
Construction was booming. Airfields, cantonments, barracks, ammunition plants, synthetic rubber plants, housing for war workers—-contracts were let and work was rushed throughout the land. The 1942 construction program within the United States totaled some 13 billion dollars—the greatest in history. Deliveries of machinery and equipment added another 3.5 billion. In relation to resources, the program was too big.
It takes time to build a special purpose plant and get it into production. It takes time to ready a peacetime plant for production of war goods. The American people were impatient, and industry responded with one of the most remarkable achievements in history. Hundreds of plants came into production ahead of schedule and they produced faster than schedule. One manufacturer of machine guns, for example, could boast he was 60 per cent ahead of schedule.
The production curve climbed steadily. In March the rate of munitions production was twice what it had been in No-
GPO—War Board 2903—p. 3
vember, 1941. By June it was three times greater. The President announced that nearly 4,000 planes were produced in May.
Then production began to falter, and the answer was, in part, materials shortages and the problems of scheduling that these shortages increased. More steel, copper and aluminum were being produced than ever before, but not enough. America learned, for example, that it couldn’t get all the synthetic rubber it wanted because it takes, among other things, a lot of copper to build a synthetic rubber plant, and some ammunition plants were temporarily shut down and others were running at less than capacity for lack of copper. Steel was short. Aluminum was short. Rubber was short, and silk; and all the good substitutes for them were short.
Conservation measures, already well developed, were intensified. Industry cooperated with government in cutting down industrial waste. Production for civilian purposes was cut further. Products for civilian and soldier were simplified. Specifications were changed: steel treads instead of rubber treads on tanks, a Victory bicycle model, no 3-inch pipes where a 2-inch pipe would do.
The American people were asked to alleviate the materials situation by getting back into production millions of tons of scrap metal that had accumulated in junk piles, cellars, attics and farm yards during the years of unlimited supply when the American habit had been to throw away the old and call for the new. In the early months of the year as many as 45 steel-making furnaces had been shut down for lack of scrap. After July not one was shut down for that reason. Chairman Nelson called upon the newspapers for a whirlwind scrap collection campaign, and the newspapers and their readers came through. Before snow flew more than 5 million additional tons of scrap metal were collected, and the mills were assured of enough to see them through the winter.
The scrap campaign and other conservation measures alleviated the situation, but the troubles of the ailing production program had to be attacked at their roots. The program had growing pains. It had grown so fast it was out of balance; more contracts had been let for munitions, construction, equipment, transportation and other military and civilian items than there was material to fill them.
The first big job had been done, and done well: American industry was in production for war. The WPB went on to the next big job: achieving maximum sustained production by helping to get every plant on an approved schedule within a precisely balanced overall program. Materials and other resources had to be budgeted and allocated to produce the greatest possible amount of the
things needed most by the United Nations at any given time.
The normal laws of supply and demand had long since become inoperative, because there was no ceiling to demand, and the nation’s ability to produce, which had never before been tested, was definitely limited. The preference rating system, designed to insure that urgent production got materials ahead of less urgent, bogged down because there were more “urgent” calls than there was material. Rating in the A-l class progressively became less valuable.
The Production Requirements Plan, a big improvement, was set up as a means of allocating materials on the basis of the quarterly needs of the various manufacturers. It proved inadequate principally because it did not compel that the total program would be kept within ability to produce and because it didn’t make sure that some components wouldn’t be manufactured at the expense of others. The patriotic manufacturer, for example, who boasted his production of machine guns was 60 percent ahead of schedule had unwittingly caused some other manufacturer of an equally important product to be behind schedule. Further, some manufacturers, determined to keep their plants on schedule, ordered more materials than they needed before they needed them.
The War Production Board, with the cooperation and advice of the _ Armed Services and other government procurement agencies and with management and labor, worked out a new system to control and implement production in an economy of scarcity; the Controlled Materials Plan was announced early in November.
Under CMP the War Production Board divides available steel, copper and aluminum among the government agencies responsible for filling the essential military and civilian needs of the United States and the other United Nations. Each agency, in turn, cuts it programs to fit its share of materials and divides the steel, copper and aluminum allotted to it among its manufacturers. Thus, each manufacturer is assured of just enough material, when he needs it, to produce precisely what is asked of him. CMP goes into effect gradually until July 1, 1943, when it becomes the only system under which Controlled Materials are allocated.
In the meantime, in spite of some clogged channels and bottlenecks, the rate of production continued to climb until it was more than four times greater than it had been a year before.
On the anniversary of Pearl Harbor the American people, their allies and their enemies were told that 1942 would see production of approximately 49,000 planes, 32,000 tanks and self-propelled artillery, 17,000 anti-aircraft guns larger
than 20 mm., and 8,200,000 deadweight tons of merchant shipping. There was the additional satisfaction that most items—particularly planes—were bigger and more complicated than those contemplated when the goals were set.
Other figures and comparisons help to tell the story of production accomplishments for 1942. In 1941 the United States spent $13,800,000,000 for defense. In 1942, $52,500,000,000 was spent for war. In the first World War rate of expenditures hit a peak of about two billion dollars a month. By the end of 1942, the rate exceeded 6 billion dollars a month.
Three and one-half times as many aircraft—bombers, fighters, transports, observation and trainers—were produced in 1942 as in 1941. Production of guns, large and small, and of tanks and ammunition, was six and one-quarter times 1941 production. Naval vessel production was two and three-quarters times and merchant shipping five times.
By the end of the year the monthly rate of U. S. military plane production was twice that of Germany’s. The U. S. and the United Kingdom together were producing two and one-half times as many planes as all of Axis Europe combined. United States war production at the end of 1942 was equal to that of all the Axis nations, and the United Nations were out-producing the Axis almost 2 to 1.
American-made weapons, however, compared with what is coming, had a relatively light effect on the fighting fronts of 1942. For one thing, much of war production was for essential nonshooting equipment. Further, much shooting equipment had to be kept in this country to train American soldiers. What equipment was available for the fighting fronts had to be scattered where it was most needed on the various fronts. Finally, much equipment that started to the fronts in 1942 was still on its way over thousands of miles of water at the year’s end.
But Americans had the satisfaction that they had helped the United Nations take the offensive on some fronts, and in the fact that the big American-made impact against the enemy was still coming.
As 1942 ended, the United States grimly entered its second year of war. In 1943, the overall war program would have to be intensified to do a better than 90-billion-dollar war job. Production for war alone would have to equal the value of all the goods and services produced by the nation in its years of greatest prosperity. It would have to produce two thirds again as much as in 1942. Attainment of these goals would mean that by the end of 1943, the United
GPO—War Board 2903—p. 4
States alone would be out-producing the Axis two to one, and with its allies would be out-producing the Axis three to one.
America was entering the third stage of its production for war. The first stage, begun in mid-1940 when a total of 12 billion dollars was available— appropriations, contract and tonnage authorizations—for all defense purposes, had ended with Pearl Harbor when the total program had reached 64 billions. This was the “curtain raiser,” the tooling-up stage. The second stage was represented by the expansion of armed forces and the rate of production achieved in 1942. The third stage, in Chairman Nelson’s words, entailed “all-out mobilization and centralized direction” over the economy.
In the third stage every man and every pound of critical materials must count. The war production labor force grew from 6,900,000 in 1941 to 17,500,000 in 1942. At least 5,000,000 more workers would be needed in 1943; no man or woman could be wasted. Faced with filling staggering demands for munitions, food, clothing, transportation and communications and all the other things needed on the home fronts of the United Nations and the military fronts of the world, the United States could waste nothing that could be used to make the enemy weaker and the United Nations stronger.
National mileage rationing had dramatized the fact that the tires owned by Americans were to be regarded as part of the nation’s resources and not as playthings each individual could use or abuse
as he saw fit. In a nation where almost every adult could afford a new suit of clothes, patches in the seats of pants were going to become popular. In a nation where extravagant cooking and eating habits had been a matter of fact, almost a matter of pride, there was going to be enough food to keep the people strong and healthy but not so much that those who wasted their shares would get fat or stay fat.
As 1942 ended, the United States, a strong nation, which was going to get leaner and stronger, strode ahead, carrying a production load that none but it could have lifted. Even the United States was not strong enough to carry non-essentials. The load was going to get heavier, and no man could say how long the journey would be.
GPO—War Board 2903—p. 5
..<. THE	MAJOR PROBLEMS r~
MATERIALS
Substantial increases in domestic production of raw materials, development of available foreign sources and stringent economy in their use during 1942 did not keep pace with ever-increasing demands. At the beginning of the year the principal production concern was facilities, but after the conversion of industry— and by the end of the year—the principal limiting factor on production was shortage of materials.
Steel
Nine months after Pearl Harbor three of every four tons of the more than 5 million tons of finished steel products produced each month were going into direct war use, and the remainder was going into such essential purposes as railroads, machinery manufacture and construction.
In terms of plates and shapes, sheets, bars, pipe, wire, rails and the like, the United States this year turned out about 62 million tons, or slightly more than 70 per cent of the 86,000,000 ingot tons the nation produced. The remaining 30 per cent went back into the furnaces in the form of scrap.
This is the way the nation's ingot production has grown since 1939:
Net tons 1939----------------------- 52, 798, 714
1940----------------------- 66,982, 686
1941_______________________ 82, 927, 557
1942_______________________ 186, 000, 000
1 Estimated.
To make this increased production possible, rated steelmaking capacity, as distinct from actual production, has been stepped up correspondingly. At the end of 1939, it was 81 million tons; 1940, 84 million; 1941, 88 million. By the end of 1942 rated capacity approached 93 million tons; by mid-1943 it will go to near 98 million. Current production is far ahead of the best all Axis nations can do, including the German-controlled countries of Europe.
Steel is the backbone of the entire armament program. It is needed not only for tanks, ships, guns and planes, but for barracks, factories, machine tools, and mining machinery. The oil industry, the railroads, the utilities and the farm machinery manufacturers must
have steel for maintenance and essential purposes; steel is needed for hangars for airplanes, submarine nets for harbors, steel for Dutch Harbor, steel for Eritrea, steel for the British, steel for the Russians, steel around the world.
The steel industry is operating currently at more than 97 per cent of capacity and has been over 90 per cent foi two years. No more steel can be turned out without new open hearth, Bessemer or electric furnaces. These huge furnaces consume large quantities of time and steel in the making. But that is just a part of the problem.
More iron ore must be mined. More ships to haul the ore from the Mesabi range in northern Minnesota down the Great Lakes to the steel mills and more blast furnaces to produce the pig iron from which steel is made must be built. More coke to use as fuel in the refining process must be produced. The nation must find more and more steel scrap, collect it, and get it to steel mills as rapidly as possible. AU of these steps are necessary to keep our huge steel plants operating at record levels and to expand them.
Alloy steels
Since essential requirements for alloy steels during 1942 were more than double the 1940 consumption, the War Production Board actively pushed a broad-scale program to assure an adequate supply of these metals, essential in every phase of our military program.
Among the major steps undertaken by WPB to fit the essential requirements to the supply has been the development of National Emergency aUoy steels. These NE steels use manganese and silicon to produce steels with qualities comparable to more highly-alloyed types.
The substitution of the more plentiful aUoying elements for the scarcer ones has been intensified. Progress also has been made in expansion of production and imports.
The problem of alloy steel supply is complicated by the fact that of the six alloying metals—nickel, chromium, manganese, tungsten, vanadium and molyb
denum—all but molybdenum come principally from outside the United States.
In 1936 when this country used 324,258 tons of chromite ore, all but 269 tons were imported from Africa, Cuba, the Philippines, and Turkey. By 1940, when war had spread widely, consumption doubled over 1936, and imports increased ten times. But domestic production was still only 2,666 tons out of 657,689 tons total supply. To meet military and essential civilian requirements in 1943, about three times the tonnage used in 1939 will be needed. This includes cutting civilian needs to something like three per cent of the former total.
Large low-grade deposits of chromite ore have been developed in Montana, California and Oregon. These ores are not of high quality, but are adequate in an emergency. The Reconstruction Finance Corporation is providing over $10,-000,000 for chromium projects, and private industry is adding several million more. The net result will be a domestic output in 1943 as large as imports in pre-war years.
The United States produces well over 85 per cent of the world’s supply of molybdenum. In the early stages of war production, this alloying metal was widely substituted for tungsten, chromium, nickel, and other more scarce alloys, but the formerly plentiful metal soon became just as short as the ones for which it was being substituted. As a result of steps taken in 1942 to increase the domestic supply, some 15 per cent more molybdenum will be produced in 1943. If tests with new and low grade mines are favorable, some several million additional pounds will become available.
In 1939 production of tungsten, needed for cemented carbides as well as tool steel, was just over 3,600 tons of concentrates. By 1941 it had doubled, and this year it was doubled again.
Large imports in 1940 and 1941 helped to build a substantial stockpile, but with spread of the war to the Far East, Oriental sources were cut off. Imports from this source for 1942 were less than in 1941. Production in Latin American countries is being stimulated, and for
GPO—War Board 2903—p. 6
the duration of the war at least, Argentina, Bolivia, Chile, Peru, Mexico will be our principal foreign sources of supply.
Strenuous efforts were made to locate and develop United States tungsten properties. A California deposit has been developed which will yield 17 per cent of the new tungsten this year. Another plant in Nevada is producing almost as much. The whole tungsten story adds up to a net shortage this year of something more than 10 per cent.
Vanadium is produced in these countries, in this order of importance: Peru, United States, Southwest Africa, Northern Rhodesia, Mexico. United States production has doubled since 1937, will be highest in history in 1942. Imports into the United States in 1942 were down somewhat from 1940.
One large domestic producer is making arrangements for the mining of very low grade ore which will yield an additional 2,200,000 pounds of vanadium. Government financial aid is being given mines whose ore is so low grade that it cannot be extracted at present prices. In 1943 further increased production, recovery of metal from flue ash and miscellaneous small sources are expected to double 1942 available supply.
Nickel, one of the oldest steel alloys, has been found in the sword blades of ancient warriors. Some of this hard, tough, corrosion-resisting metal is produced in the U. 8., but only negligible amounts—2,000 to 3,000 tons of secondary metal recovered from scrap, and 500 tons or so of primary metal as a byproduct of electrolytic refining of copper. Canadian production in 1939 was 102,000 long tons. New Caledonia annually produces about 10,000 tons, and Russia about 2,500 tons.
Even with curtailment of non-essential uses, maximum recovery of scrap, and highest possible production, serious shortages of nickel loom. Essential 1942 demand ran some four times that of 1938, and will jump to five times in 1943.
The most significant possibility of expanding our supply is increasing nickel imports from Cuba. A subsidiary of a United States corporation secured $20,-000,000 aid from the Reconstruction Finance Corporation to treat low-grade Cuban ores by a special process. The concentration of nickel in Cuban ore is low; it is expensive and difficult to extract; but our need for nickel is so great that even comparatively sparse sources are being called upon.
In pre-war years manganese imports more than matched normal requirements; the U. S. now counts on domestic production, largely from low-grade ore, to meet from 25 to 33 per cent of our essential needs.
Manganese is an absolute requirement in every pound of steel produced, nonalloy as well as alloy types. Normally, for every ton of steel produced, about 13 pounds of manganese are required. Manganese, acting as a purifying agent, makes steel sound and clean.
In 1940 imports totalled 1,294,000 long tons of the metal—more than enough to meet requirements. In that year U. S. production was only 40,000 tons. The main sources of foreign supply, in order of importance, were the Gold Coast, the Union of South Africa, Brazil, India, Russia, Cuba and the Philippines.
Every effort is being made to increase imports from sources still open to this country and to step up domestic production to the maximum. Remarkable success was achieved in 1942 in the expansion of domestic output; even more encouraging results will be apparent during 1943.
As a result of careful planning, the manganese situation is today the best of any of the alloying metals. The U. S. stockpile alone, even if not increased by a single pound, could supply our needs uninterruptedly for two years.
Copper
United States copper supply, which reached an all-time high of about 2,460,-000 tons in 1941, was increased to nearly 3,000,000 tons in 1942.
Despite a U. S. supply of copper in 1942 greater than the entire known world output in 1939 and despite the shutting off of all copper to non-essential needs, production in many munitions plants was dislocated because copper was not available.
To encourage production of marginal ores, WPB, OPA and Metals Reserve Company developed a premium payment plan to pay 5 cents a pound above the regular 12 cents for all production over certain quotas. Many mines were worked 168 hours a week. Scrap collection was a most important source of metal, resulting in more than 600,000 tons of refined copper during 1942.
The most important problem in copper production during 1942 was shortage of labor. This became acute in the middle of the year, and more than 5,000 tons of copper a month were lost in July and August because of manpower shortage. Four thousand soldiers with mining experience were furloughed to work in the mines. In spite of a wage increase of about one dollar a day, competition from ship yards, aircraft plants, army construction, and other projects constantly sucked men out of the mines. It was impossible to increase the labor force in many mines, difficult to maintain even normal employment in many. One hope of alleviating the labor shortage is that
Army construction will soon be finished in mine areas, and that miners will then go back to the mines.
Increase of imports depends upon the course of the war and shipping facilities.
Zinc
Shortages of zinc were anticipated two years ago, and conservation measures were taken in the early days of the national defense program to bring supply into balance with demand. It was not until mid-1942 that zinc again became critical.
After trimming non-essential use to a minimum, two problems—developing new sources of ore and expanding miii-ing, smelting and refining capacity—had to be solved.
Forty-eight projects recommended by the Zinc Division of WPB were put into construction. These projects include development and exploitation of new ore deposits, opening of new mines, mills, smelters and refineries. One new smelter was completed in 1942, and four electrolytic refineries with an annual capacity of 216,000 tons were put into operation.
To encourage production of marginal ores, premium prices of 2% cents a pound oyer regular prices is paid for all production over quota. Government aid in the form of technical and engineering assistance, loans, help in building access roads and attempts to correct the labor shortage was made available to zinc producers.
WPB made arrangement with the Board of Economic Warfare to step up imports of South American and Canadian ores and concentrates. Progress was made in increasing amounts of recoverable metal in Canadian concentrates.
■pie central problem in zinc supply at this time is continuing supply of ores. Ore deposits are limited, and the possibility of opening new mines of substantial size is small. Labor shortages in zinc mines, similar in all respects to those described above in copper mines, are the biggest threat to continued full production.
The U. S. faces the second year of war with uncertainty as to the adequacy of its future zinc supply.
Tin
In 1941 the United States imported 60 per cent of the world’s tin supply. Of the 195,000 tons imported, more than 90 per cent came from the Far East. With the United States and possessions and Mexico producing less than 1,000 tons of tin a year, and the Far East over 70 per
GPO—War Board 2903—p. 7
cent of the world supply, 1942 was a year of learnins how to do without tin.
The only two important sources of tin that remain to the U. S. are Bolivia and the national scrap pile. The year’s most significant development in the tin field was the completion of the Longhorn Tin Smelter in Texas. Present plans are to expand this only tin smelter in the Western Hemisphere to a capacity of nearly 100,000 tons a year. At present it can handle all the tin ore now available to the United Nations.
Efforts to recover tin from cans, which normally took half the supply, are expected to provide more than 5,000 tons of tin a year.
A project of great importance is the current expansion of electrolytic tin plate manufacturing facilities. Pre-war tin plate was made by the hot-dipping process, using about 1.5 per cent tin and 98.5 per cent steel in tin plate. The electrolytic process makes tin plate with only 0.5 per cent tin. These new plants will be in operation in time for the 1943 food crop, and will save over 20,000 tons of tin per year.
Silver is being used in bearings and solder instead of tin. Glass, paper, and fibre containers are being used instead of tin cans, and dehydrated food is taking the place of quantities of canned goods.
Aluminum
Just before Pearl Harbor, the United States aluminum supply was at the rate of 917,200,000 pounds a year. At the end of 1942 the rate was about 2,300,000,000 pounds. Further expansion of aluminum producing facilities will give the U. S. a total supply of about 3,000,000,000 pounds a year before the end of 1943. Of the 1942 total, 230,000,000 pounds came from Canada.
One of the most significant developments of 1942 in aluminum production was the conversion of alumina plants to low-grade domestic bauxite and the construction of new plants to use the low-grade ore. The United States will be completely independent of foreign-ore imports by May of next year, and by September will be able to supply Canada’s bauxite needs as well, thus not only assuring a continued supply of aluminum, but saving shipping and military and naval forces required to insure safe transportation of the vital ore.
During 1942, eight new ingot aluminum producing plants came into operation, with a total rated capacity of more than 1 billion pounds.
Expansion of fabricating facilities— forging, rolling and extruding mills—is under way, but because of the longer period of time required for the construction, they will not catch up with ingot production until well into 1943.
Labor shortage has been a more or less pressing problem throughout the year, becoming critical in the last quarter. This limitation on aluminum production will continue to be a grave problem.
Magnesium
Large-scale production of magnesium was carried on in the United States for the first time in 1942. Magnesium, little known and produced since its discovery some 25 years ago, became an important partner of aluminum in aircraft manufacture.
The month before Pearl Harbor, U. S. magnesium production was at the rate of 42,000,000 pounds per year—not large by today’s standards, but tremendous by 1939 standards (6,000,000 pounds) or even 1941 (33,000,000). At the close of 1942 production was at the rate of 260,-000,000 pounds per year.
A program to raise U. S. production well over 600,000,000 pounds per year is well under way. Eight plants in this program, with a rated capacity of 324,-000,000 pounds per year, came into production in 1942. These plants ranging from annual production of 10,000,000 pounds to over 112,000,000 each, already in partial production, were scheduled to come into full production during the early months of 1943.
The outstanding technological development of the year in magnesium was the ferro-silicon process for extracting magnesium in commercial volume. Dolomite, a plentiful raw material, is reduced in a gas or electric furnace, the magnesium condensing in the form of pure metal. Less electric power is required and construction of the plants takes less critical materials than other types. Enough magnesium is in sight to meet military needs for the duration.
Lead
Lead is the one important metal in which a critical shortage did not exist at the close of 1942. When concern was first felt for lead supply, back in October, 1941, control over distribution was established and an emergency lead pool was set up. Immediately after Pearl Harbor, restrictions on certain end uses of lead were established.
U. S. supply of lead at the end of 1942 was at the rate of 1,308,000 tons per year,
contrasted with a rate of 1,339,000 late last year. About 350,000 tons of this lead were recovered from scrap, a decline of about 10 percent from 1941 which is more than offset by increased imports. The net gain in available lead supply grew out of decrease in civilian uses.
The favorable lead outlook brought a slight easing of restrictions on use of lead in building and other products in November.
Principal concern for lead during the year has been to build a stockpile to take care of all contingencies. To this end all possible production has been encouraged, including premium payments of 2% cents per pound above regular price for all production over quota, and the same efforts to correct labor shortages as in the cases of copper and zinc.
Miscellaneous
Not one mineral has escaped the pressures of war during our first year in the conflict. The year 1942 saw silver changed from a monetary and luxury metal to an industrial metal of first importance. The country’s gold mines were slowed down or closed during the year to save critical materials and manpower.
Throughout the minerals industry pressure for production has been applied on all fronts. Mercury, the non-metal-lics, mica, clays, quartz crystals, the rare metals—all have important war uses and have been increased in production tremendously.
RUBBER
The capture of 90 percent of the world’s rubber supply by the Japanese in the first three months of the war put rubber high on the list of America’s critical materials. In September, the Baruch Report found the rubber shortage “so dangerous that, unless corrective measures are taken immediately, this country will face both a military and civilian collapse”.
Malaya and the Netherlands Indies were the only sources of natural rubber in the world which had been successfully exploited to an important extent prior to the present war. When the Japanese armies overran this area in early 1942, the United States had no place to turn for the 600,000 tons it consumed annually in normal times, or for the several hundred thousand additional tons needed for modern, mechanized warfare.
The rubber stockpile that had been built up in 1941 totaled less than a year’s supply, and synthetic production was infinitesimal; a modest plant expansion
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program was getting under way. Sources of crude rubber still open to the United States, in Africa and South America, offered no prospects of large supplies for a long time. The same thing was true of guayule and the other rubber-bearing shrubs.
There was no delay in realizing the magnitude and seriousness of the problem once the normal supply was lost. The synthetic rubber program was expanded immediately, with the goal set for more than 400,000 tons in 1943 and still greater capacity later. The sale of new tires, except on strict rationing basis, was stopped January 5; recapping was restricted February 19. On May 2, the Office of Defense Transportation was given authority over all rubber-borne transportation, and ten days later gasoline rationing began on the eastern seaboard—both as a gasoline and rubber -saving measure.
There followed a period of public confusion on the subject of rubber, fed by a multitude of pseudo-experts and conflicting opinions of those in possession of facts. Faced with both problem and confusion, the President appointed a rubber survey committee, composed of Chairman Bernard M. Baruch, Dr. James B. Conant, and Dr. Karl T. Compton to investigate the situation.
The Baruch Committee assembled the facts about rubber, studied them, and, on September 10, laid down a comprehensive program designed to carry the nation through the rubber shortage. The report stressed both rubber conservation and increased synthetic production. To bring about the former, the Committee called for nationwide gasoline rationing, 35-mile speed limit, periodic tire inspections and a program to maintain essential civilian driving for the duration. The Committee further recommended the expansion of the projected synthetic program to 1,100,000 tons annually, as well as of reclaiming facilities and scrap collection, and urged the appointment by the Chairman of the War Production Board of a Rubber Administrator with full authority to carry out the recommended program. A week later, the President created the Office of Rubber Director in WPB, and Donald M. Nelson appointed William M. Jeffers director.
The conservation measures recommended by the Baruch Report, to make the one million tons of rubber now on automobile tires last as long as possible, have been put into effect. A nationwide 35-mile per hour speed limit, a system of periodic tire inspection and a tire replacement and recapping program all began within two months of the submission of the report, and on December 1 nationwide mileage rationing was instituted to limit the use of rubber to essential driving.
The difficulties in the way of synthetic rubber production are formidable. America had to start from scratch in building a synthetic rubber industry when construction materials were scarce. The maintenance of the synthetic rubber plant building schedule depends on an adequate flow of materials, on manpower and on the development of a corps of highly specialized technologists and executives. The first plant was scheduled to come into production in January. Others will come in during the first nine months of 1943. If the plants begin operation on schedule, there is still no certainty as to the success of the varoius processes in large-scale production. If all goes well, 50,000 tons of synthetic rubber will be produced during the first half of 1943. After this date, production will climb rapidly, and the nation’s rubber inventory, after reaching a low point in September, should begin to climb in the fall of 1943. Every pound of synthetic rubber produced in 1943 will have to go to the armed forces, but it should be possible to allocate important quantities of synthetics for the manufacture of civilian tires in the late spring of 1944.
Neither South American sources of natural rubber nor expansion of guayule, cryptostegia, and other rubber-bearing shrub production will produce any large amount of satisfactory rubber for some years. In cooperation with the Brazilian Government, every effort is being made to increase rubber production in the Amazon Basin and to expand transportation facilities for that purpose. The difficulties of transportation, sanitation and labor supply in this vast jungle area cannot be solved quickly. While the amounts received from Latin America, currently producing about 25,000 tons a year, will help, they will not substantially alleviate shortages. Production of guayule rubber in 1943 will be a drop in the bucket compared to needs; a shortage of seed prevents large-scale production before 1947.
1943 is the crucial year in the rubber situation. Military demands for rubber are still growing, and will increase steadily in 1943. America has 30 million tire replacements, the majority of them old tires, retreads and tires made of reclaimed rubber, to take the place of the 90 million new tires which would normally have been consumed during the past year and the next.
If the vast and ambitious synthetic rubber program is completely successful, and if the tires now on the road are carefully preserved, the United States will have defeated the rubber shortage by this time next year. If not, the rubber shortage, in terms of civilian transportation breakdown and a rubber-starved military machine, may have defeated the United States.
CONSERVATION OF MATERIALS
An all-out conservation program in 1942 helped to enlarge and replenish the country’s stock piles of scarce raw materials. Thousands of tons of critical material have been made available for war purposes by simplifying the designs, models and sizes of industrial products, by revising architectural and engineering specifications, by substituting more plentiful materials for the scarce, and by salvaging the accumulation of years of waste from the homes, factories and junk yards of America.
The number one item in WPB Conservation Division’s 1942 program was the pressing need for iron and steel scrap. During the early months of 1942 some 40 to 45 steel-making furnaces were cold at times for lack of scrap. As a result of salvage activities, no open-hearth furnace closed down for lack of scrap after July.
After a record 12 months in scrap iron and steel consumption, America’s steel mills and foundries ended the year with sufficient scrap on hand to carry them through the winter months, when the flow of scrap to the mills normally diminishes.
To bring in the scrap from farms and homes scattered throughout the country, 13,000 local salvage committees were organized in 48 states, involving well over 300,000 workers on a volunteer basis.
The Newspaper Scrap Metal Drive was carried on in every state during October and November, with well over 90 per cent of the nation’s newspapers answering Chairman Nelson’s challenge to help get out the scrap. In a national contest carried on in connection with the Drive, in which an estimated 5,350,000 tons of scrap were produced, Kansas carried off top honors, collecting 158.7 pounds per capita, Vermont was second with 155.4 pounds and Washington was third with 141.5 pounds. (As reported by the Newspaper Scrap Drive Committee on November 24.) Nebraska, whose original record of 103.4 pounds per capita inspired the nationwide drive, was sixth on the list and collected an additional 123.1 pounds per person in the new drive. On the basis of incomplete returns, over one-half of the counties in the United States will qualify for the WPB Salvage Pennant by collecting over 100 pounds per capita.
Many other groups helped to make possible the outstanding scrap collection record. Farm implement companies helped move rural scrap into dealers’ yards, particularly in connection with the “Scrap Harvest” program. The 30,-000,000 school children of the nation accounted for approximately one and
GPO—War Board 2903—p, 9
one-half million tons of scrap, or about 100 pounds apiece. WPA furnishec transportation and workers in manj areas. The American Industries Salvage Committee financed and carried on a national promotion campaign at a cost of two million dollars. The Automotive Safety Foundation, the American Legion, and hundreds of other national groups also helped get in the scrap.
As a result of the coordinated activities of all these cooperating organizations, a Gallup Poll survey indicated that four out of every five American Families either gave their scrap to the war effort or had no scrap to give. Of the 21 percent who stated they still had some scrap they could give to the war effort, more than half had already been contacted by their local committees.
Over two million tons of top grade, heavy iron and steel scrap in the form of abandoned streetcar lines, forsaken mines, and unused bridges, whose movement was impeded by legal, financial and other difficulties, were moved to the mills.
The scrapping of over four million cars furnished approximately three million tons of iron and steel scrap, as well as substantial amounts of other metals. The average turn-over time for moving jalopies through the scrap yards was cut from seven months to a national average of less than 45 days. In the fall and summer of 1942, cars were being moved out of auto graveyards at the average rate of 450,000 a month. The rate of conversion of jalopies into scrap during the last eight months exceeds in volume the production of new cars in any eight month period.
Seventy percent of all purchased iron and steel scrap comes from industrial plants. In its effort to keep this scrap moving back into production, WPB has had the cooperation of the nation’s newspapers, of 3,500 volunteer salesmen from industry, and of the American Industries Salvage Committee.
Other salvage drives initiated dining 1942 also produced spectacular results. America made scrap a household word and built new stockpiles of rubber, copper, tin, paper, silk and fats.
President Roosevelt’s “whirlwind” scrap rubber drive in June netted 450,-000 long tons of scrap rubber. This figure compares with 292,000 long tons consumed during all of 1941. Total rubber collections by the end of October amounted to 520,000 long tons, and inventories had climbed from 184,000 long tons at the end c. June to 583,000 tons at the end of October.
Waste paper was collected so enthusiastically in the first five months after Pearl Harbor that it became a glut on the market in May.
By September the amount of scrap copper recovered for war production purposes had already exceeded the total copper scrap collections for the year 1941.
Tin, which used to come from Jap-held Malaya, was mined last year from the bathroom cabinet and the kitchen trash can. In October, detinning plants received 12,000 tons of tin cans, while returned collapsible tubes that once held shaving cream and toothpaste yielded almost 80 tons of tin in the same month.
Over 5,100,000 pounds of waste household fats and greases were sold to butchers by war-minded housewives in October and the glycerine is now on its way to make explosives. Fat collections are increasing month by month, having climbed from 3,000,000 pounds in August to 5,000,000 pounds in October.
In November, the ladies dug out their worn and torn silk and nylon stockings and sent them to war for powder bags and other war materials.
To the stockpiles created by salvage were added even greater quantities of raw materials, produced by simplification, substitution and specification revision. For instance, 75,000,000 pounds of primary aluminum were saved by segregating scrap aluminum at the toolheads, and 156,000,000 pounds of copper were conserved by freezing inventories of fabricated and semi-fabricated parts in factories and warehouses. Eliminating its use in mop-wringers saved 35,000 pounds of bar and strip steel; 12,000 pounds of black sheet steel were conserved by diverting this metal from calendar edgings. Reducing the types of bicycles from 20 models to 2 simplified models per manufacturer saved hundreds of thousands of pounds of steel, copper and rubber, not to mention thousands of pounds of nickel, chromium, tin and cadmium that went into bicycle gingerbread—bells, stands, baskets, and toolboxes. Substituting glass for steel in icebox drain pans saved 65,000 pounds of steel in defense housing projects alone. Revising specifications for a “Victory Model” stove in 240,000 defense houses saved 19,200,000 pounds of steel.
Down-grading of materials is constantly in progress; 6,000 tons of primary copper, for example, have been saved by specifying secondary and scrap metals of less than accustomed purity in the manufacture of certain types of bronze and brass castings.
A “material substitutions and supply list” has been maintained to reflect the relative essentiality and the current relative supply status of several hundred materials—metals, plastics, chemicals, lumber, cordage, etc.—useful in the war effort.
The armed services have accepted substitutes wherever such materials
would not interfere with combat efficiency. A saving of 3,000,000 pounds of rubber for use in bomber tires was effected by substituting cattle-tail hair for rubber in tank and jeep linings. By substituting steel for brass in certain types of ammunition and cartridge cases, the Army saved over 77,000,000 pounds of copper for other uses where nothing but copper would suffice. It conserved 900,-000,000 pounds of steel by substituting wood for steel in truck cargo bodies.
Trifles make a tremendous difference. Great quantities of copper were saved simply by reducing the copper content of cartridge brass from 70 per cent to 68 per cent.
The chain of substitutions is endless. Saving copper by changing the cartridge brass formula put pressure for that extra per cent of material on a relatively more plentiful (but still critical) material—zinc. It then became necessary to find a substitute for zinc, used principally to galvanize iron and keep it from rusting. Lead has now replaced scarcer zinc as a protective coating on sheet iron used to make non-critical domestic items.
By reviewing architectural and engineering specifications for U. S. construction projects down to the last detail and revising them to knock out excess quantities or non-essential uses of critical materials, it was possible in 1942 to save 800,000,000 tons of steel, 60,000,000 pounds of copper, and 6,000,000 pounds of rubber.
By changing specifications for new buildings, it was possible to save 10 per cent of the structural steel needed for each building. The steel requirements for each new mill built in 1942 were reduced by 20 per cent, and the steel needed for re-inforcing bars in concrete was cut down by 25 per cent through engineering design study and revision of specifications.
Most changes in specifications, all simplifications and many substitution measures which were designed principally to save materials, achieve additional savings in manpower, transportation, and productive capacity. For instance, the elimination of 349 out of 710 types of radio tubes, in addition to conserving critical supplies of mica, molybdenum, nickel and tungsten, also released 158,000 man-hours and 80,000 machine hours for extra war production in 1942. More than 75 limitation orders involving simplification were issued in 1942.
PRIORITIES AND
ALLOCATION OF MATERIALS
Methods of controlling the flow of materials to industry were revised during 1942 as supply dwindled in relation to demand. Both the early priorities system and the Production Requirements Plan,
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designed to see that first things came first in material allocations, broke down under the burden of a war production volume that grew from 2 to more than 6 billion dollars a month during the first year of the war.
The priorities system, under which preference ratings were issued for countless products and parts, was in force when the year began and worked reasonably well until the volume of production began to intensify materials shortages. Preference ratings insured that the most urgent requirements got first call on materials, that materials needed for essential products were not wasted on non-essentials.
But, as our plants tooled up and began producing—and they tooled up fast and soon were using up materials at enormous rates—as our war production machine went into high gear, requirements for materials exceeded ability to supply them. As the war program gained in momentum, more preference ratings were issued than there were materials to fill them. Copper, for instance, had ratings running down to A-10, but there was only enough copper to fill orders down to A-1—c. A manufacturer with a rating for copper of A-l-d or lower might just as well have had no rating at all.
That situation developed into a race, or scramble, in which some manufacturers got materials and some didn’t. This situation was further aggravated because some manufacturers, determined to keep their plants running on schedule, ordered more materials than they needed. Thus while one manufacturer, for example, might boast that he was sixty per cent ahead of schedule on the machine guns he was making for combat planes, another manufacturer making engine parts for the same planes might be running way behind schedule for lack of the steel that was in the guns that were piled up ahead of schedule—or for lack of steel lying idle in some other manufacturer’s warehouse.
In an effort to improve the priorities system, the Production Requirements Plan, or PRP, was devised. PRP was a step forward because each manufacturer was asked to estimate his requirements for three months ahead and to report what materials he had on hand. Then WPB attempted to see that he got enough additional materials, and only enough, to meet his production requirements. This not only greatly reduced the volume of paper work, but also made it possible to schedule production with greater certainty than had been the case under the previous system of individual preference ratings for the varying materials.
PRP was announced on December 3, 1941 and became operative for the first quarter of 1942. By the end of February more than 2,500 plants were operating1
under the new plan, and when Priorities Regulation 11, issued in June, made it mandatory for companies using more than $5,000 worth of certain materials per quarter to come under PRP, the number grew to over 20,000.
Under PRP, while the Materials Branches of WPB were determining the anticipated supply of materials, the general staffs of the United Nations informed the WPB of their requirements of weapons and ships, and the armed services of the United States and the Maritime Commission reported the types of materials and equipment most vitally needed, and their order of urgency.
The Requirements Committee of WPB, on the basis of this information, plus the necessary data on civilian needs, established the broad policies for the distribution of scarce materials. The policy decisions of the Requirements Committee, on which the Army and Navy are represented, determined the part of the total available supplies of basic materials which could be made available in each calendar quarter to war industries and other consuming groups. Within these broad policy limits the Director General for Operations determined the quantities of scarce materials granted to each individual company in each calendar quarter.
By October 1, nearly 30,000 manufacturers were operating under PRP, and their applications for materials constituted a report on about 95 per cent of war industry’s basic requirements. For the first time, a reasonably complete supply and demand picture became available and it was possible to trim authorizations to purchase material to fit known stocks. WPB had taken a long step away from simple priorities toward allocation of materials in accordance with the needs of the war program.
Despite the fact that PRP was a distinct improvement over the earlier system, a fundamental weakness soon became evident. Distribution of materials under PRP was on a horizontal basis. Each firm, large or small, prime contractor or sub-contractor, submitted its own requirements and received an individual authorization to obtain materials directly from the WPB. To keep total allocations within the known supplies, most of these authorizations had to be far less than the amounts requested. Otherwise, the same “inflation” that occurred when more individual preference ratings were issued than there were materials available would have been repeated. In adjusting the requests, however, it was found impossible to cut companies making parts in exactly the same proportion as the companies turning out the finished products in which the parts were to be used. Efforts to balance the program within PRP by urging all parts and finished product manufacturers to
make the necessary adjustments among themselves failed, and it became evident that an even stricter materials control system would have to be established. This next step toward an all-out war economy was taken with the announcement of the Controlled Materials Plan in November, to become fully operative in the second calendar quarter of 1943.
Evolved from existing distribution systems and from experience gained through their operation, CMP has the approval of all governmental agencies participating in it. It was drafted after lengthy conferences with the Army, Navy, Maritime Commission and Office of Civilian Supply as well as representative consumers and producers of materials, who contributed many suggestions incorporated in the final version.
The main purpose of the plan is to make certain that production schedules are adjusted within material supply so that production requirements are met. Under CMP, allotment of materials is vertical in nature. That is, the materials to fill an army contract for tanks flow from the Army to the prime contractor and, through him, on down to every subcontractor, making parts for those tanks. Enough materials to make the tanks, and just enough, are allotted. And no tanks are scheduled unless materials have been allotted for them.
Carbon and alloy steel, copper, and aluminum—the three basic critical materials—will be the first “Controlled Materials” to be directly allotted under the plan.
Under CMP, the Requirements Committee of WPB, which makes the broad, final allotments, doesn’t dole out so much steel, copper and aluminum directly to the manufacturers. Rather, it deals directly with the Army, Navy, Maritime Commission and the other government agencies which actually apportion the materials. These agencies are known in CMP as the “Claimant Agencies.”
The Requirements Committee knows how much steel, copper and aluminum are available for a given calendar quarter. Before it can apportion the available supplies among the various Claimant Agencies, it must know how much is required by each one.
To supply this information, prime contractors prepare and submit a breakdown of all materials required for the approved end-pipducts on which they are working. The breakdown comprises a “Bill of Materials” specifying not only what materials are required but when they must be received to meet authorized schedules.
In making up his Bill of Materials, each prime contractor includes both the materials he puts into production himself, and those needed by his subcontractors and their suppliers. The Bill of
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Materials covers requirements not only for Controlled Materials but also for other scarce materials.
The Bills of Materials obtained from prime contractors are assembled by each Claimant Agency and total requirements are then submitted to the WPB Requirements Committee, and to the respective Controlled Materials Divisions, which make the necessary adjustments to bring the whole program into balance with available supplies.
When requirements have been brought into balance with supply and the programs of the various Claimant Agencies are approved, the WPB Vice Chairman on Program Determination—who also is chairman of the Requirements Committee—allocates, with the advice of the Requirements Committee, authorized quantities of the three Controlled Materials to each.
The Claimant Agencies, in turn, distribute these broad allotments of materials among prime contractors by means of “Allotment Numbers”, which constitute a right to receive delivery. The prime contractors pass on the Allotment Numbers as necessary to their subcontractors and suppliers.
Custom-built products for the armed forces or other Claimant Agencies, such as guns, tanks, ships and planes, are known as Class A products, and receive their materials allotments directly from the Claimant Agencies. Other products, including standard parts of Class A products—such as nuts, bolts, small motors and the like—as well as maintenance and repair products for both industrial and civilian use, are on the “Class B” list. They receive their materials allotments from the Office of Civilian Supply, through the various Industry Divisions.
Materials other than Controlled Materials continue to be distributed through the priorities system. Each company receiving an Allotment Number carrying an allocation of Controlled Materials also receives a preference rating for use in obtaining other materials.
CMP will go into effect gradually until July 1, 1943. Until that time existing procedures, including preference rating orders and PRP certificates and individual material allocations under “M” orders will continue in effect for consumers who have not been able to qualify under CMP.
It is expected that CMP will shorten substantially the production cycle from raw material to finished product. And while time is of the first importance, now that our forces have actually engaged the enemy, it shares this position with another vital element. This is flexibility. When the shifting tactics of
modern war alter strategic requirements, immediate adjustments must be possible, and the method of vertical distribution under CMP provides the mechanism for rapid shifts in the flow of materials to those production schedules most urgently needed in any given set of circumstances.
CMP will force balancing of the o 'er-all program so that the right number of tanks are made in relation to ships, for example, and it will also force scheduling of each end product so that exactly the right number of propellers for a certain type of plane are made in relation to number of engines made for that plane. The goal of CMP is to put the whole program in balance, and each plant on schedule.
Compliance
Any system of industrial controls requiring restrictive orders must have adequate policing, if the law abiding and patriotic manufacturer is to be protected from the less scrupulous. This generalization applies alike to the priorities system, the Production Requirements Plan, and CMP.
In its enforcement activities during the year, the Compliance Division of the War Production Board checked the operations of more than 50,000 firms. Nationwide surveys of industries, or segments of industries, were carried out with the assistance of investigating staffs lent for the purpose by other Federal agencies. WPB’s own personnel investigated more than 18,000 suspected violations of priority orders and regulatitons, and 7,500 PRP firms were audited by field investigators of the Wage and Hour Division of the Department of Labor, acting as agents of WPB.
Some 4,500 cases of significant or wilful violation were turned up. The great bulk of these were disposed of by warning letters. However, 32 criminal and 10 civil cases were referred to the Department of Justice for appropriate legal action. In addition, the War Production Board itself issued nearly 200 penalty orders against offending firms. The penalties imposed, for the most part, consisted of denial of priority assistance and allocations of restricted materials for periods of time ranging from three months to one year.
The Compliance Division held 252 meetings at which the workings and requirements of the priorities system were explained to approximately 150,000 industrialists. As a by-product of its investigating activities, the Compliance Division discovered large amounts of critical materials held in excess, unused, or un-reported inventories. One hundred twenty-five million pounds of ferrous metals, nearly 16,000,000 pounds of copper, and 4% million pounds of aluminum and 26,000,000 pounds of other non-ferrous metals were found in this manner.
CONVERSION OF INDUSTRY
By the end of the summer of 1942, American metal-working manufacturing plants had practically completed the change-over from production of normal peacetime products to production of combat material and the other goods and supplies needed to win this mechanical war.
This change of product was loosely called “conversion”, although in many instances it was only a change of customer. Soldiers and sailors must be fed, clothed and shod. Moreover, war industry uses many machines and components exactly like or closely similar to those used in the manufacture of peacetime products. In many manufacturing plants the change-over, even where the end product was entirely different, meant little more than working to new blue prints and specifications.
Conversion, properly speaking, had to do with those highly specialized plants which were designed for maximum efficiency in mass production of a single product such as an automobile, a mechanical refrigerator, or a washing machine. In such plants layout had to be altered, machines had to be adapted where possible to the performance of new operations and new machines had to be installed. In short, these plants had to be pulled apart and completely rearranged.
In many such plants much skill and ingenuity were used in rebuilding and adapting machinery. One large refrigerator plant bought from two government arsenals some 300 machine tools, many of which had not been used since the last war, rebuilt and modernized them, and put them to work making machine guns.
The automobile manufacturers were the largest producers of a highly specialized end product. This industry ceased production for civilian use (except replacement parts) in February and is now producing more than 200 war items. 659,000—150,000 above peak in June, Employment in September was up to 1941—and shipments of war goods were at the rate of nearly 7 billion dollars a year, 50 percent more than the highest dollar rate ever reached in peacetime. A vast amount of this output, probably 60 percent, is being produced in buildings and with machines formerly making automobiles and automotive products.
This is typical of most of the industries which produced consumers’ durable goods—industries in which the greatest degree of conversion was necessary.
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The automobile industry is by far the largest in this category, but it was not the first to start conversion. The first was the domestic washing machine industry which as early as August 1941 (curtailment of normal products wasn’t ordered until October) organized to manufacture gun mounts.
Although there was some curtailment of civilian goods production during the latter months of ’41, conversion of facilities didn’t begin in earnest until stop orders began to be issued in February. April was the cut-off date for refrigerators, vacuum cleaners, home radios and for certain kinds of metal office furniture; May for domestic washing machines, June for lawn mowers and residential oil burners, July for pianos and domestic sewing machines.
Orders of this kind stopped production and induced conversion of the principal consumers’ durable goods industries, industries which in 1941 produced goods to the value of more than $6 billion and gave employment to more than 600,000 wage earners. The dollar value of war goods produced by these industries in 1942 will not equal the 1941 figure for normal products because production of war items did not get under way until midsummer in most plants. But the rate of production at the end of the year was higher in many cases than any peacetime peak. Employment during the conversion period had dropped sharply but the duration of this unemployment was much shorter than anticipated because conversion was far more rapid than expected. At the end of the year employment, with few exceptions, was back to normal or higher.
The last big civilian goods industry to be curtailed was the farm machinery industry in which production was cut, on November 1st, to 20 percent of the 1940 rate—except for replacement parts and a few critical implements. During the year which ended October 31st, 1941, the industry had been curtailed only 17 percent because of the need for increased food production, but some important firms were heavily engaged in war work in expanded plants throughout 1942. Owing to the drastic curtailment now in force, real conversion of the farm machinery industry may be expected.
In addition to these “heavy” consumers’ durable goods industries, the production of hundreds of everyday articles was practically stopped by orders which prohibited the use of aluminum, copper, steel, and other scarce metals in their manufacture.
There are many instances of ingenious adaptions of facilities to the manufacture of war items. A New York maker of handbag frames redesigned a machine gun ammunition feeder so it could be made largely on blanking and forming
presses. A Minnesota tombstone maker converted to ship sections, using grinding equipment that formerly surfaced granite to face the edges of steel plates for welding. A lawn mower manufacturer developed a comparatively simple machine for the making of armor-piercing bullet cores as fast as can be done on multiple spindle screw machines. A small machine shop in Texas bought a 25-year-old engine lathe, rebuilt it and got subcontracts from 5 important war plants. Instances of this sort are almost without number.
In considering conversion and the degree to which peacetime manufacturing facilities are being used for the production of war goods, it must be remembered that combat material of all kinds, from ships to shells, is made of metals and essentially of heavy shapes, bars, strips, plates, forgings and castings. In short, war materials are made neither of wood nor of light sheet metal. Bomb fins and ammunition boxes are, but the demand for these has not been large enough to employ the thousands of plants equipped to fabricate light sheets. The metal office furniture industry, consequently, has found it difficult to employ its large facilities in war production.
A similar situation existed in the woodworking industry, although the development of trainer planes and gliders made largely of wood has brought war work to many of these plants. Adaptation in this field has been difficult and will likely remain so.
A sidelight of interest in connection with peacetime industry concerns manufacturers whose normal products are in great demand for military use. Motorcycles, for example, are required in such number by all the services that the two producers have been obliged to more than double their output. The manufacturers of industrial sewing machines and of commercial laundry machinery, to cite two out of many examples, have had to meet heavy demands from the services and from war industries.
It may be said that “conversion” had ceased by the autumn of 1942 to be an important concern of the War Production Board for it was either achieved or well on the way to achievement. A report compiled in September revealed that in 74 metals-working industry* groups, 91.2 per cent of all unfilled orders were for war work. In many of these plants shipments (in July) of war goods were far below what is expected when peak production is attained, but it was plain that the future was all for war.
SMALL MANUFACTURERS
For more than a year after the United States began to expand war production, most of the contracts went to the larger industrial firms.
This was only natural. The United States had no war industry and the army and navy had their special sources of supply well established—for an ordinary war. Plans had been made years before; everything was cut and dried. Procurement officers knew where to go for all standard war items, and to these sources they went. New special purpose plants were to be built for new items, such as airplanes and tanks.
Some smaller plants were little interested in the new war industry. They were getting along all right, making things for civilian use, demand for which was greater than ever.
Not until after the attack on Pearl Harbor, when it became apparent to everyone that our share in the war could not be conducted as a side-show, was real concern felt about the survival of smaller plants in an economy geared to the immeasurable needs of a global war.
As early as the autumn of 1940, however, a “Small Business Committee” was set up in the National Defense Advisory Commission. Later this became the Defense Contract Service in the Office of Production Management, and in September, 1941, the Contracts Distribution Division, which extended a field organization started by Defense Contract Service. By the end of the year, branch offices had been opened in 113 cities throughout the country.
These succeeding agencies sought to help small plants adjust themselves to the rapidly changing conditions in industry by action in two directions: first, by seeking small allotments of scarce materials for the production of civilian goods; and, second, by assisting the smaller firms to obtain war contracts. The organization of groups of small plants to provide suitable facilities for war work was encouraged.
During this period, when the whole emphasis was on speed and volume, and when war production facilities were being further expanded, procurement officers experienced trouble in heeding the appeals of small firms for a greater share in the war production program. The Contracts Distribution Division concentrated on an effort to induce prime contractors to do more subcontracting and, in this field, from February to June, 1942, was instrumental in the placement of 14,948 subcontracts valued at something over $522 million. Pools, except in a few cases, proved to be an illusory solution due to the inability of groups to provide for themselves suitable engineering talent and managerial control.
In the meantime, as restrictions on the use of critical materials became tighter and more general, the smaller firms be-
GPO—War Board 2903—p. 13
gan seriously to feel the pinch and a demand arose for more effective action.
This eventually translated itself into an Act of Congress, passed in June 1942, which provided that the Chairman of the War Production Board would appoint a Deputy whose sole concern would be to secure a greater share of war production for the smaller plants of the country.
The Act created the Smaller War Plants Corporation, with a capital of $150,000,000 to aid small firms in financing war contracts and in converting their plants so they could get war work. The Corporation was empowered, also, to act as prime contractor. At year’s end, little use had been made of the Corporation’s money-lending powers and none of its function as a prime contractor. At the end of four and one-half months, loans aggregated just over one million dollars.
To give effect to this legislation there was established in the War Production Board a Smaller War Plants Division with Lou E. Holland as its head. Mr. Holland felt that little improvement could be achieved without a more effective liaison with the several procurement agencies.
A series of negotiations was culminated by agreements between the Smaller War Plants Division and the heads of the services, supplemented by directives to all procurement officers, calling for submission to the Smaller War Plants Division of all requirements so that items suitable for production by smaller plants could be selected for consideration.
This was a distinct advance over any previous effort and it promises to make possible the placement of a large volume of war contracts with smaller plants.
Requirements are made known early enough to give the Smaller War Plants Division time to examine them and find suitable facilities for the production of a great many items formerly ordered, more or less in a routine manner from long accepted sources of supply.
Smaller War Plants Division engineers select items that can be produced by smaller plants whose facilities are known to be capable and recommend them to procurement officers. Smaller War Plants Division field representatives check these facilities on the spot where necessary, and also assist the smaller plants in working out the best production methods. As a result of this procedure, the rate of placement of orders with small firms not previously able to get war work is steadily increasing.
In addition to making requirements known to the Smaller War Plants Division before placement of orders, the directives issued to procurement officers called for a re-examination of existing
prime contracts, with a view to further sub-contracting. They directed the cancellation of machine tool orders wherever it was found that the work to be done by them could be done by sub-contracting.
However, it is clear that the Smaller War Plants Division and its financial corollary, the Smaller War Plants Corporation, do not constitute a panacea, and that they cannot be expected to provide work for, all manufacturers whose normal business has been hurt by tile War. Inevitably, the casualties of war will include many business casualties. The war calls for sacrifice and contribution by every citizen. The degree of sacrifice varies greatly—from the man who gives his life or a leg, to the man who loses his business or employment.
By December 12,1942, the Smaller War Plants Division was instrumental in the placement of 234 prime contracts with a value of $28,300,000. The Critical Tools service, a unit of the Division which records available hours on 55 types and sizes of critical machine tools throughout the country and offers this available time to contractors, was instrumental in obtaining for 1577 firms work valued at $107 million. These figures do not include large volumes of subcontracting placed through the Division, since complete information was not available at the end of the year.
CONCENTRATION OF INDUSTRY
Concentrating production of civilian goods into as few plants as are required to produce essential quantities is a production principle thoroughly studied by WPB in 1942, although its application was not widespread. It is a system widely used as a wartime efficiency measure in most of the warring nations, friends and foes alike, and will undoubtedly be extended in the United States in 1943.
Chairman Donald M. Nelson announced last July that the WPB had “approved the principle of concentration of industry as a means of alleviating the strain on the civilian economy by the war effort.” Concentration of production is practical wherever one or more of the following conditions is found in an industry producing essential civilian goods:
1.	Where the industry has manufacturing facilities in excess of those required to produce the permitted amount of goods for civilian production, and where the facilities are suitable for production of military goods.
2.	Where production of civilian goods has been so restricted that efficient operation of all firms in the industry is not possible.
3.	Where a substantial part of the production of civilian goods is found to be
in areas where there is a shortage of labor, power or warehouse facilities or where assembly of raw materials and distribution of the finished product would place a burden on transportation which would be avoided if production were elsewhere.
In our war economy, the production of goods for civilian use must be cut to an irreducible minimum, except in those rare instances where production of the article can cause no impediment to the war effort.
If, in a given civilian goods industry, production is cut to 25 percent of normal, it is impracticable to permit all the firms in the industry to continue to operate. It is of no consequence that the owner of the plant might be willing to sustain the loss and the workers satisfied with three days employment per week. Plant facilities, power and labor would be wasted—and in a war economy nothing may be wasted.
By concentrating production into as few plants as can produce that amount, working full time and at full efficiency, maximum efficiency can be attained. All the other plants must be utilized in some other way. Equipment capable of producing military goods should be so utilized if possible. Some equipment may be useful in other plants. The workers can most certainly be used—in the factories, in service, trades and on the farms.
The first concentration order, issued May 15, affected both heating and cooking stoves. It prohibited stove manufacture by firms whose sales in 1941 amounted to $2,000,000 or more, and by all plants, regardless of size, in 39 areas in 15 states where the supply of labor was short.
Of the 229 firms in the stove industry, 171 had sales in 1941 of less than $2,000,000; they were outside the labor shortage areas and were permitted to continue to make simplified types of stoves. No standard model was adopted but elimination of unnecessary features tended to unify types. No scheme of compensation of the closed firms by those remaining in the field was set up. No provision was made to conserve the value of trade marks or brands of firms which had to cease stove manufacture.
Many firms, particularly the larger ones, converted to war production—in most cases, at higher levels of employment than before the order was issued. Other firms, whose equipment did not lend itself readily to war production, found it impossible to get war work, and many of their workers have gone into war plants. Shortage of materials has hampered production of permitted volume by the firms still producing stoves.
An order governing the typewriter in
GPO—War Board 2903—p. 14
dustry has been called a concentration order, but it has few of the characteristics of concentration. Production was stopped entirely in the four large firms and permitted to continue in the one remaining firm, whose normal production volume was less than 3 percent of that of the total industry. Even this small amount was cut almost in half and the whole of this permitted production is for military and government requirements. The typewriter order was, in reality, a stop-production order with an exception—not a concentration order.
The bicycle industry has been concentrated-according to pattern. There were 12 firms in the industry, which in 1941 built 1,800,000 bicycles. Production was cut to 10,000 per month and confined to two firms; 6,000 bicycles are to be built by a firm in Massachusetts, 4,000 by one in Ohio. Trade marks were eliminated. A single initial letter following the serial number identifies the manufacturer. No compensation is provided for the firms denied production. The model being built is a standard one, christened the “Victory” model when it was brought out.
The other ten bicycle manufacturers are largely engaged in war production, some of them with employment greater than before, but others have found conversion to war work difficult.
On August 26th the Chairman of the War Production Board set up a Committee on Concentration of Production of which Joseph L. Weiner, Deputy Director of the Office of Civilian Supply, is chairman. On this committee are representatives of the Smaller War Plants Division, the Director General for operations and of the Labor Production Division. It determines what industries are to be concentrated and the arrangements to be made.
The operation of the Controlled Materials Plan will provide a base on which to build concentration plans, since it will determine the amount of materials available for the production of civilian goods. With this basic factor known, it becomes a simpler matter to arrange for the efficient production of the required volume. CMP also will assure materials for the permitted volume.
It is erroneous to consider concentration as a negative procedure. Without concentration an industry cut, say, to 25 percent might disappear entirely. Concentration prevents this and provides efficient production of the necessary 25 percent, and reasonable profits for the remaining producers.
CONSTRUCTION AND FACILITIES
The facilities program during 1942— including construction and machinery and equipment—totaled approximately $18.5 billion. This was $4.5 billion larger than 1941, which was also a record year, and three times the average facilities volume of the last decade. The
1942 total comprises close to $13 billion for construction within the U. S., $3.5 billion for machinery and equipment and about $2 billion for construction outside the U. S.
Before reviewing 1942 construction it is well to take a look at figures for the previous year. The over-all volume, including machinery and equipment and construction within and outside the U. S., amounted to $14 billion. Construction within the U. S. alone totaled more than $11% billion, a figure exceeding by more than $1 billion the previous peak years of 1925,1928 and 1929. Direct military and war factory accounted for more than $4% billion of this total while civilian construction accounted for more than $7 billion.
Original plans for the 1942 program, made in the fall of 1941, called for a total program of about $12% billion. These plans included approximately $5% billion of direct military, $2% billion of factory (of which more than $2% billion would be war factory), $2% billion Of housing (of which less than $500 million would be non-war housing), and approximately $2^2 billion of other types of construction, including highways, farms, utilities, and other miscellaneous categories.
After Pearl Harbor, the program was reviewed again. The direct military construction program was Increased only slightly to a total of about $5% billion. The factory program, however, was increased by about a billion dollars to permit manufacture of tanks, airplanes and munitions at a faster rate than had been scheduled in the late fall of 1941. Curtailments of approximately $1 billion were made in the fields of highways, conservation, sewer and water, farm, utilities and war housing. War housing was cut more than $300 million and the balance was lopped off the other groups. Construction in 1942 followed the program pretty closely.
At times the 1942 program took nearly 3 million men from our labor force. It consumed approximately 13 million tons of cast iron and steel in the form of finished products, which means it took a pig and ingot capacity of 18 million tons. It took about 180 million barrels of cement, nearly 160,000 short tons of copper in finished products, nearly 190,000 short tons of lead, nearly 75,000 short tons of zinc and more than 21 billion board feet of lumber. These figures do not represent maintenance and repair. Lumber consumption for construction, maintenance and repair, for example, almost certainly exceeded 26 billion board feet in 1942.
A glance at the amount of work done in a number of specific types of construction built this year may give us a better understanding of the accomplishments. Military housing for more than 250,000 men was provided in a single month. This included not just housing but
streets, utilities, recreational facilities, hospitals, and all facilities necessary to house and train men equivalent of building a fair-sized city in a month.
Aeronautics construction reached a peak of about $250 million a month. This is the equivalent of building 50 airfields a month—each of about 2% square miles, equipped with runways a mile long, wide parking areas, gasoline, oil storage and distribution facilities, hangars and repair shops.
More than $400 million of war factories were constructed in one month, the equivalent of a factory a mile wide and more than 2 miles long built and equipped each month. An average of about 40,000 residential units were built each month, the equivalent of a city of 200,000.
The need for men and materials for direct war activity next year makes it necessary to cut these huge figures by an average of about 35 percent—from $13 billion in 1942 to $8 billion in 1943.
Early estimates of machinery and equipment needed for 1943 were for approximately $5 billion but measures are being taken to reduce this figure as much as possible. It is hoped that the volume will be held to $3.5 billion in machinery and equipment for new facilities. There will be some additional for replacement purposes. If machinery and equipment amounts to $3.5 billion next year, the overall new facilities will be approximately $11.5 billion, reduction of about $7 billion from the 1942 overall figure.
There are several causes for the machinery and equipment figure holding up while that for construction falls off. One is that a considerable amount of equipment will go into buildings, plants and factories built during 1942 for operation in 1943. Another is that greater use will be made of existing buildings so that addition to facilities will comprise machinery and equipment rather than construction. Still another cause for the increase is that machinery and equipment constitute the major portion of the facilities needed in the essential aircraft, high-octane gasoline and synthetic rubber programs.
Factories built in 1942 must have men to run them in 1943. Guns, tanks and planes being turned out in factories in 1942 and in 1943 will demand «men in the armed forces to man them in 1943. It is obvious that the nation cannot afford to have 3 million men in construction in 1943. When ships, tanks and guns are being delayed because of a shortage of steel, the nation cannot afford to divert 20 percent of its iron and steel output to construction. When production of ammunition is being delayed due to a shortage of brass, the nation cannot afford to divert 160,000 tons of copper or 75,000 tons of zinc to construction. The nation simply does not have the manpower or the supplies of raw material to continue to construct at the 1942 rate.
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PROGRAM ADJUSTMENTS
It became possible late in 1942 to get a firmer and clearer grasp upon our long-range program. There had been a variety of programs before—some civilian and some military—but the blue print of an overall program had not been unrolled. In preparing any program of such magnitude there must be consideration for each of its components as well as for the broader aspects. It must provide for the munitions needed by our armed forces; and just as importantly it must provide for the goods and services to maintain a sound, healthy civilian economy.
The overall program has been divided into seven major components, each balanced within itself and with all others. There are the programs of the Army, Navy, Aircraft, Maritime Commission, Office of Civilian Supply, BEW, OLLA. Each of the seven agencies are responsible for their parts of the overall, long-range program.
For some time after the beginning of the war effort, the individual programs were out of balance. In the haste to arm the United States and her Allies, there was little time to lay out an orderly program: the main object was to get started. Now the time has come for adjustments in these programs so that only those items that are definitely a part of the over-all program will be produced.
Program adjustments are being made with many problems in mind—manpower, materials, facilities—and also with the need of the items on the program in mind. Viewing the program in its entirety, the one projected for 1943 will be approximately double that for 1942. It will mean that about $75 billion of war production will flow from facilities next year.
Viewing the program in its component parts, one may see many changes. Production of some items will be many times vaster than this year. There will be, for example, more guns, about twice as many merchant ships, twice as many aircraft. Production of other items will be considerably less—some cut out entirely as the passenger automobile was this year.
To gear production to the essential requirements of the over-all program will mean, in many instances, cancellation of contracts for items which do not fit in. It also will mean more contracts for items which are called for in greater number in the 1943 program.
The initial responsibility of making component programs balanced within themselves rests with the seven governmental agencies. The Army makes up the army program, the Office of Civilian
Supply handles the civilian economy program, etc. Likewise the agencies rearrange these orders to fit in with the master program as it is finally adjusted by the Requirements Committee of WPB.
A considerable amount of construction undertaken during 1942 was to provide facilities for component programs. As these programs are adjusted, so must be the construction programs to which they are linked. Consequently, some facilities that were planned, but not yet started, will not be started. The exact number is not determined, but it generally includes those plants which various planners had in mind to build to begin producing late in 1943 and 1944.
Some facilities that were started, but have not yet been used, may not take an immediate part in the war program. One example is a certain type of ordnance plant recently completed in the South and designed to make a kind of ammunition for which, because of the current military situation, there is no immediate use. This plant may be converted to another use, or it may stand by until there is a need for its product. For it to begin making its special ammunition would merely mean it would use up critical materials which are badly needed for other types of ammunition required immediately. There are not many facilities in this category, however, and as a general rule, the plants now being built for special purposes have a definite place in the current war program.
There are other facilities, now making exactly the kind of items needed in the current program, that will close down. In such instances the cause will be an over-supply of similar facilities. Plants making metal components for certain ordnance items, for instance, are far ahead of some making ammunition with which to load them. In balancing this part of the program—so that the number of shell cases equals the loading capacity—it is necessary to retard production of the components ahead of schedule and divert material to those components behind schedule.
The over-all tightening up of facilities makes it possible to use building material only for those structures that fit into the current war program. It will be recalled that the recent directive on construction, signed by the Chairman of the War Production Board and the Secretaries of War and the Navy, established the principles for curtailing facilities expansion. In some instances entire projects have been discarded; in others, projects have been reduced in size. Generally it has meant that much building scheduled for completion late next year and after has been shelved. Material that would have gone into it
is going into facilities needed immediately to make munitions currently behind schedule.
Continuous studies are being made to determine exactly what facilities are needed to keep the program in balance. It is likely that there will remain in each field some over-expansion. This additional capacity, however, is desirable. Even in the operation of a balanced program, additional capacity should be on hand so that a sudden need for more production will be met by stand-by facilities ready to begin work.
In adjusting facilities to match the available flow of materials, some facilities will close down. It may be difficult to understand why Plant A making, for instance. Type B aircraft guns, should cease operations. But if there are facilities elsewhere that are making enough Type B guns to equip all the planes designed to use them, the guns made in Plant A actually are not needed. If produced, these guns can only be stored somewhere, and remain idle. The steel and alloys that go into these extra guns should go into other types of guns that will be put to immediate use.
Thus closing down certain facilities is not a waste, but rather a move taken to prevent waste—the waste of critical raw materials. It may be possible to rearrange Plant A so it can produce another type of gun. Or such a change may not be possible within a reasonable period of time. The choice in such cases, is one of selecting the facility best suited to the program.
All these problems of facilities will receive constant attention by the War Production Board and by the other governmental agencies concerned with efficient utilization of industrial capacities in 1943.
LABOR’S PART
Even before Pearl Harbor, American labor realized that some day it would be called upon to help stop the dictators. When Japanese bombs fell, labor responded with increased effort.
Production records have been broken in practically every category of war materials. The battleship New Jersey was built 18 months ahead of schedule. Bombers, fighters, and tanks are being assembled in the United States faster than ever before anywhere in the world.
Organized labor has relinquished the strike as a weapon for the duration of the war, and the effectiveness of this nostrike pledge is indicated by the fact that the total time lost from all labor disputes, including even walkouts in unorganized plants, lockouts, and unauthorized strikes, was only seven one hundredths of one
GPO—War Board 2903—p. 16
percent of the man days put into war production. In no month has time lost been more than one tenth of one percent.
America’s seagoing workers, members of seamen’s unions, risk their lives again and again to carry war supplies and food across the oceans to our battle lines and those of the other United Nations, and raw materials from other lands to the war plants of our country. Many have gone down with the ships. Those who survive have not hesitated to go to sea again.
Working men and women have bought billions of dollars worth of war bonds during the year. Leaders of labor enlisted millions of workers in support of the plan to assign 10 percent of their pay envelopes to the purchase of war bonds.
On the production front, growing scarcity of manpower became an increasingly serious problem during 1942. While labor surplus exists in many areas, there were not enough workers in many strategically essential areas and industries.
Fighting strength is limited by the effective size of the production forces behind the lines. A manpower shortage in the copper mines, for instance, caused by the migration of men from mining to higher paid jobs in airplane and munitions plants and to the armed services, reduces the output of this vitally needed war material and causes slow downs in key war industries. In an all-out war, the man in the mines is as important as a man at the front; without him, factories stand still and fighting men lack ammunition.
In June of 1940, the labor force consisted of 56.7 million of whom 8.6 million were unemployed—leaving a net force of about 48 million in employment or the armed forces.
By June of 1942, the labor force had grown to 59.9 million, of whom 2.8 million were idle, a net of about 57 million in employment or the armed forces.
By December of 1943, America must have an active labor force available for employment or the armed services of at least 62% million men and women. Since a net of 61% million active workers or fighting men are needed, this figure allows for only a million out of work at any one time (barely the minimum estimate of men and women between jobs and on vacation.)
Thus by the end of next year, the total number actually employed or in the armed forces must increase by 4% mil
lions from the June 1942 level and well over half of these must come from groups not previously in the labor force.
As compared with June 1940 levels, 13% million more must be in employment or in the armed forces by the end of 1943—an increase of 28 per cent.
By the end of 1943, almost half of the total labor force will be engaged either in war industry or the armed forces— based on present estimates of the needs of both groups.
Since these figures represent only non-agricultural employment in war work, the remaining 30 or 31 million workers must supply war workers with the necessary food and clothing and shelter. Million of others will have to help out on a seasonal or part time basis.
Withdrawal of several million workers from peace time pursuits into the armed forces has aggravated labor supply problems in industry, mining, agriculture, transportation and service trades. War industry, for example, has not only had to expand its labor force enormously but to train replacements for those called into the armed forces.
With the establishment of the War Manpower Commission in April, 1942, WPB’s Labor Production Division became the agency to represent labor within the WPB rather than an agency to handle labor supply problems for the Government. The division serves as a two-way channel to promote the most effective participation of labor in war industry.
A Labor Policy Committee made up of representatives of AFL and CIO is consulted on all divisional policy.
The director of the Labor Production Division has served as a member of the War Manpower Commission, and the six members of the Labor Policy Committee have been designated by Chairman McNutt as representatives of their respective organizations on the Labor-Management Advisory Committee, which has played an important role in the development of manpower policies.
Further labor participation in WPB developed in consequence of negotiations by labor leaders with Chairman Nelson following a review of war production needs on August 25 when a score of labor officials gathered for a Labor Production Division conference on materials shortages. Participation of labor men in the operating divisions of WPB was stimulated by the discussion at that time.
Participation in important WPB operating units is affording labor the opportunity to present labor’s position on significant issues, so as to assure most efficient use of available workers. Labor Advisory Committees are being established in each of the WPB Industry Divisions, which are also served by consultants assigned by the Labor Production Division.
Labor-management committees have been established in cooperation with the War Production Drive Headquarters (which is in Chairman Nelson’s Executive Office), to secure the most effective utilization of production facilities, raw materials and manpower. Valuable production ideas, ways to save time or materials and reduction of absenteeism have resulted from the work of these committees.
WPB labor consultants have aided the Conciliation Service and the War Labor Board in connection with disputes arising out of war production operations, or out of internal trade union situations or War Production Drive operations.
The war effort has been notably speeded by effective stabilization agreements between labor and industry in the building and construction trades, and in shipbuilding, under machinery provided by the Board of Review and Shipbuilding Stabilization Committee in the Labor Production Division.
Labor’s enthusiastic support for the all-out war effort has been focused on specific projects by rallies, labor institutes, mass meetings, and labor press material developed by the Division. It has also investigated and dealt with problems injuring labor morale in some key industries.
Labor relations experts are now attached to the regional directors’ staffs. Chosen from the ranks of labor, these representatives effectuate within each region the national policies and programs of the Labor Production Division and participate in regional War Manpower Commission activities.
On December 6, President Roosevelt centralized responsibility for manning the armed forces, industry, and agriculture in the hands of War Manpower ’Commissioner McNutt, WPB’s chief responsibility in this field during the coming year lies in increasing the effective utilization of war industry workers, and using the national labor force to the best possible advantage.
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ORGANIZATIONAL DEVELOPMENTS
As the problems of war production changed during the months of 1942, the organization of the War Production Board, created early in the year to assure the mobilization of all the productive resources of the United States, was adjusted to meet them.
The Office of Production Management (OPM), established January 7,1941, carried over into the first days of 1942, but it was apparent that OPM was inadequate to gear the Nation to the volume of production called for by the President.
To understand the present organization of the War Production Board, it is helpful to trace the evolutionary process from which it emerged.
The first organization charged with responsibility for getting the defense production program under way was the Advisory Commission to the Council of National Defense, established May 29, 1940.
Known as the National Defense Advisory Commission, it consisted of these seven members:
William S. Knudsen, in charge of Industrial Production.
Edward R. Stettinius, Jr., Industrial Materials.
Sidney Hillman, Labor.
Leon Henderson, Price Stabilization.
Harriet Elliott, Consumer Protection.
Chester Davis, Agriculture.
Ralp Budd, Transporation.
Members of the NDAC met once or twice a week, discussed requirements and methods of attaining them, and wrote advisory reports which were channelled to the President through a secretary. Like the early defense organizations of the first World War, NDAC had no executive power and could neither issue nor enforce regulations. Its inadequacies became apparent as the military plight of the democracies became more desperate and the scope of the American effort was Increased. The total U. S. authorized defense program had grown from 12 billion dollars when NDAC was established to 21 billions by the end of 1940. The United States learned, as it had in
the World War, that its defense production program must be directed by a central body with one executive head authorized to enforce regulations it deemed necessary.
Consequently an Executive Order of the President, dated January 7, 1941, provided that the activities and agencies of NDAC were to be coordinated within the Office for Emergency Management (OEM), which was an extension of the President’s Executive Office. On the same day the President established within OEM the Office of Production Management, designed to be the production arm of government. The NDAC became inoperative as its functions were absorbed by OPM and other new agencies within OEM.
The Executive Order establishing the OPM designated that it should consist of a Director General (William S. Knudsen) , an Associate Director General (Sidney Hillman), the Secretary of War, and the Secretary of the Navy.
This Council was charged with responsibility to “formulate and execute in the public interest measures needful and appropriate” to accelerate the defense program. In its operations it was a centralized “executive” form of organization, as compared with the “commission” form represented by NDAC.
The Executive Order stipulated that within the OPM were to be three operating divisions—Production, Purchases, and Priorities. Each division handled all the problems in its particular sphere. Later a Labor Division was added to handle labor problems. These divisions were to be headed by directors appointed by the OPM Council with the approval of the President.
At first the OPM functioned much like the Advisory Commission which preceded it, with each of its divisions operating rather independently of the others. Each division was broken down into industrial sections, each of which handled a phase of its division’s sphere of activity for all of industry. Thus, it was necessary for a manufacturer who came to Washington with a number of problems to call on various sections, each handling a limited aspect of his problems, in each of the divisions. It was this confusion and lack of coordination between the divisions, together with increasingly serious materials and other problems, that led to
the first major reorganization of the OPM.
Commodity Sections were established, each of which was designed to handle all the problems of the particular industries assigned to it. Thus, when men from industry came to Washington they knew where to go with their problems. All their problems, so to speak, were given a home. The Commodity Sections were set up in the three original divisions: Purchases, Priorities and Production. This centralization of the problems of an industry in one unit, which became a focal point between that industry and Government, was one of the most important organizational advances in the production arm of Government. It is interesting to see how those first sections evolved into the present industry divisions.
Following this first reorganization, another division was established. To broaden the base of production and to encourage the awarding of war contracts among the thousands of smaller manufacturing firms in the country, the Contract Distribution Division (formerly the Defense Contract Service of the Production Division) was set up.
The second major reorganization of the OPM was brought about partly as the result of a conflict in priorities authority. OPM had authority to issue and enforce priority orders, but the Office of Price Administration and Civilian Supply (OPACS), which had been established to curb inflation and rising living costs and to insure that essential civilian demands were provided for, had a conflicting authority relating to civilian supply. There was little coordination between the actions of the two agencies. In order to resolve that conflict and to unify priorities power, an all-powerful board, the Supply Priorities and Allocations Board (SPAB), was set up August 28,1941, to determine how resources were to be divided. OPM was given the sole authority to be central coordination agency for priority administration. Simultaneously, the President issued an order establishing the Office of Price Administration (OPA) and transferring to the OPM the civilian supply function of abolished OPACS.
Within OPM the original commodity sections were reassigned and were called industry branches. A Division of Civilian Supply was established and industry
GPO—War Board 2903—p. 18
branches primarily concerned with consumers’ commodities were temporarily transferred to it. Industry branches dealing with consumers commodities for which there was a large demand by government procurement agencies were transferred to the Purchases Division. Branches covering industries which specialized in production of military equipment remained in the Production Division. A Materials Division was added and into it were put the materials branches.
But these assignments of branches to the various divisions proved unsatisfactory in effecting conversion of the industries assigned to them, and branches in the Purchases and Civilian Supply Divisions were instructed to report to the Director General.
OPM continued in existence for several weeks after the Japanese attack on Pearl Harbor, but it was apparent that lack of central direction internally and lack of authority to coordinate the activities of other government agencies relating to war production made OPM inadequate to harness the full might of America’s industrial power to a program for which 64 billion dollars had been made available at the time of Pearl Harbor and which was bounding toward 238 billions.
The War Production Board was established January 16, 1942, by President Roosevelt to assure “the most effective prosecution of war procurement and war production.” The Executive Order gave Chairman Donald M. Nelson authority to:
(a)	exercise general direction of war procurement and war production,
(b)	determine the policies, plans, procedures and methods of other Federal agencies with respect to war procurement and war production,
(c)	have full and final authority over the issuance of all priority ratings.
The President has stipulated that other members of the Board, who are to serve the Chairman in an advisory capacity, consist of the following:
Secretary of War (Henry L. Stimson).
Secretary of Navy (Frank Knox).
Secretary of Agriculture (Claude R. Wickard).
Federal Loan Administrator (Jesse Jones).
The Lieutenant General in Charge of War Department Production (Wm. S. Knudsen).
Administrator of the Office of Price Administration (Leon Henderson).
Chairman of the Board of Economic Warfare (Vice President Henry A. Wallace) .
Special Assistant to the President Supervising the Defense Aid Program (Harry L. Hopkins).
At the top of the new organization established by Mr. Nelson were advisory, policy-making, and progress reporting offices and committees. Other divisions performing legal, administrative, informational, and other services for the organization were transferred intact from OPM.
Also transferred from OPM were the coordinating and operating divisions: The Purchases Division, which had overall responsibility for coordinating procurement policies of other government agencies; the Production Division, which expedited military production; the Materials Division, which was responsible for increased production of raw materials; the Division of Civilian Supply, which ascertained our essential civilian needs and assured that those needs were filled as far as possible in the war program; the Labor Division, whose job it was to assure adequate manpower to carry out production programs and to bring to the Chairman information and recommendations relating to production problems in which labor is primarily involved, and to act as liaison between WPB and organized labor. (Later the labor supply and training-in-industry functions were transferred to the War Manpower Commission, and the Division became the Labor Production Division.) The Contract Distribution Division of OPM was made a branch of the Production Division of the War Production Board and later was abolished.
Finally a new division was established, the Division of Industry Operations. The Bureaus of this division contained the Priorities Division, the industry branches which had reported to the Director General, and the field organizations of OPM. The division was responsible for carrying out policies for utilizing to the fullest extent the industries of the nation. In the industry branches the problems of the industries assigned to them were further centralized to carry out the conversion operation.
This organization was set up primarily to issue orders assuring that materials were channeled into essential products and that industry was converted to war production as rapidly as possible. Although new units, committees, and sections were added to handle various problems and situations as the need for them became apparent, this basic organization served through the industry conversion stages.
However, as the principal immediate objective of WPB changed from that of converting industries into war production to that of assuring that each in-dustry got everything it needed to operate on a definite schedule within a precisely balanced over-all program, the Chairman saw the necessity of re-ar
ranging the structure of his organization.
There followed, beginning in July, a series of major and minor re-alignments which in an evolutionary process resulted in the present organization. It is designed to provide the most effective utilization of resources of the nation in an economy in which there is no ceiling on demand but in which the ability to fill demands is definitely limited, particularly by supplies of materials, manpower, and other resources.
The principal offices, bureaus, and divisions the Chairman has established to formulate and implement production policies can be divided into three spheres. There are the Chairman and the general staff agencies, the Office of the Production Vice Chairman, and the Office of the Program Vice Chairman.
THE CHAIRMAN AND THE GENERAL STAFF AGENCIES
Chairman Donald M. Nelson is in supreme control of all the policies and operations of the War Production Board.
Vice Chairman W. L. Batt relieves the Chairman of many administrative problems, acts in his absence, and works closely with him on many important matters.
Vice Chairman J. S. Knowlson represents the Chairman on the Combined Resources and Production Board, which coordinates production programs and utilization of resources of the United States and the other United Nations.
A Planning Committee under the chairmanship of R. R. Nathan serves the Chairman as a sort of “trouble shooter” and recommends policies to him.
The War Production Drive Headquarters seeks to Insure maximum production and labor participation through labor Management Committees in the various war plants.
The Office of Organizational Planning formulates organizational policies for carrying out operations of the War Production Board.
The Office of Rubber Director was ordered established within the War Production Board by the President. The Rubber Director, William M. Jeffers, has authority over the rubber program.
The Smaller War Plants Division, established within the War Production Board, seeks to insure that the facilities of smaller manufacturing firms and resources in areas without war contracts are brought into the production program to the greatest extent feasible.
The Procurement Policy Division coordinates procurement policies of the Armed Services and other government agencies.
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The Statistics, Information, Administrative, and Legal Divisions provide the other divisions and offices of the War Production Board with their specialized services.
The Office of Civilian Supply is responsible for presenting to the Requirements Committee the essential civilian needs of the nation.
The Labor Production Division sees to it that the WPB policies will insure that organized labor can make a maximum contribution to the production program.
THE OFFICE OF THE PRODUCTION VICE
CHAIRMAN
Production Vice Chairman C. E. Wilson exercises general supervision of the scheduling of the programs between the various services to see that they do not conflict, and that they are of such a nature that they may be performed in accordance with the requirements of the Joint Chiefs of Staff and of the total war program. In carrying out these duties, Mr. Wilson has the advice and assistance of the Production Executive Committee. This committee includes:
Lieut. Gen. Brehon B. Somervell, Commanding General, Services of Supply, U. S. Army.
Major Gen. Oliver P. Echols, Commanding General, Material Command, Headquarters, Army Air Force.
Vice Admiral Samuel M. Robinson, Director of Material and Procurement, U. S. Navy.
Rear Admiral Howard L. Vickery, Vice Chairman, U. S. Maritime Commission.
Ferdinand Eberstadt, Program Vice Chairman, War Production Board.
Mr. Wilson is charged with the particular duty of central supervision and direction of the production programs of aircraft, radio and radar equipment, and escort vessels. He exercises these duties through the supply and procurement branches of the services.
In the case of the aircraft program, Mr. Wilson has the advice and assistance of the special Aircraft Production Board. The members of this board, in addition to Mr. Wilson, are:
Lieut. Gen. William Knudsen, U. S. Army.
Major General Oliver P. Echols, U. S. Army, Air Forces.
Rear Admiral R. A. Davison.
Mr. T. P. Wright, War Production Board.
While Mr. Wilson has authority to inquire into any feature of the war production program and to 'consult on production matters with officials of the services or any producer, he issues his direc
tions through the supply services of the Army, the Navy and the Maritime Commission.
The Directors of the Shipbuilding, Aircraft Production, Radio and Radar Divisions report to the Production Vice Chairman and are responsible for production within these industries.
THE OFFICE OF THE PROGRAM VICE CHAIRMAN
The principal functions of the bureaus and divisions in the Office of Program Vice Chairman, which is headed by Program Vice Chairman Ferdinand Eberstadt, are to coordinate programs and effect distribution and allocation of materais and other resources to meet them.
Mr. Eberstadt is Chairman of the Requirements Committee, which divides the total available supplies of materials among the government agencies responsible for production of military and essential civilian goods, reconciling the several demands with ability to fill them. Other members bf the Committee:
John F. Fennelly, Vice Chairman.
Brig. Gen. L. C. Clay, Hdqs. Services of Supply, War Department.
Rear Admiral Henry Williams, Office of Procurement & Material, Navy Department.
Lt. Col. W. F. Rockwell, Director of Production Division, U. S. Maritime Commission.
Emilio G. Collado, Special Assistant to the Under Secretary and Executive Secretary of the Board of Economic Operations, Department of State.
J. Anthony Panuch, Chief, Requirements Branch, Board of Economic Warfare.
John L. Pratt, Special Consultant to the Lend-Lease Administrator, Office of Lend-Lease.
Joseph Weiner, Director, Civilian Supply Division, WPB.
Ernest Kanzler, Director General for Operations.
Brig. Gen. Bennett E. Meyers, Joint Army & Navy Aircraft Representative.
Frank Isenhart, Executive Secretary.
Included on the staff of the Program Vice Chairman are a Program Bureau and a Facilities Bureau.
The Program Bureau acts as a staff to the Requirements Committee, bringing together figures on supply of materials, labor and other requirements, and recommends an integrated allocation program to the Vice Chairman. The Facilities Bureau analyzes what the approved programs mean in terms of new facilities and endeavors to hold new construction to a minimum, and to insure that essential construction is com
pleted on schedule. The Bureau reviews all construction projects.
The Director General for Operations, Ernest Kanzler, who reports to the Program Vice Chairman, directs execution of programs approved by the Program Vice Chairman. The staff of the Director General for Operations includes the Distribution Bureau and the Resources Agencies. The Distribution Bureau, in line with approved programs, directs the distribution of resources through preference ratings, the Production Requirements Plan, and the Controlled Materials Plan, and other distributional systems. It also handles compliance, appeals, and the central auditing of materials accounts. The Resources Agencies plan and direct programs looking to better use of materials, manpower, transportation, and other national resources through scrap and salvage programs, simplification and substitution, requisitioning, stockpiling, and redistribution of materials and equipment, concentration of industries, protection of plants and resources.
The Directors of the Controlled Materials Divisions—the Steel Division, the Copper Division, and the Aluminum Division—report to the Director General for Operations. The remaining divisions are grouped under five operating bureaus as follows :
The Minerals Bureau—in which are the Mining, Mica-Graphite, Tin, Lead, Zinc, and miscellaneous minerals divisions.
The Commodities Bureau—under which are the Chemicals, Printing and Publishing, Pulp and Paper, Cork and Asbestos, and Containers Divisions.
The Consumers Goods Bureau—under which are the Food, Beverages and Tobacco, Consumers Durable Goods, Textile, Clothing and Leather, Service Equipment, and Distributors Divisions.
The Construction and Utilities Bureau—under which are the Plumbing and Heating, Building Materials, Lumber and Lumber Products, Power, Transportation Equipment, Communications Equipment, and Governmental Divisions.
The Equipment Bureau—under which are the General Industrial Equipment, Automotive, Tools, Farm Machinery, Construction Machinery, Safety, and Technical Supplies Divisions.
The Industry pivisions, focal points between the WPB and industries assigned to them, can profitably be examined in some detail.
Within each of the Industry Divisions are a Labor Advisory Committee and one or more Industry Advisory Committees, through which the advice of labor and management can be fully utilized; and a sub-Requirements Committee comprising representatives of the Army, Navy, Maritime Commission, Board of
GPO—War Board 2803—p. 20
Economie Warfare, Office of Lend-Lease Administration, and Office of Civilian Supply.
Through its staff, each division sees to it that its industries are run in line with approved programs.
The Program Sections of each division, working with the central Program Bureau, estimate requirements of manufacturers and propose a reconciliation between those requirements and available supply. The Distribution Sections of the divisions, working with the central Distribution Bureau, assure that the products of the various industries are produced and distributed in accordance with program determinations and see to it that the industries get everything they need for approved production. The Re
sources Sections, in collaboration with the Resources Agencies, assure that industries assigned to each division are utilizing the resources of the nation to the fullest extent in the execution of their approved programs.
To further narrow the focal point between the WPB and industry, the divisions are broken down into industry and commodity sections, which give specialized attention to each industry or to groups of closely related industries.
Thus, each division helps its industries to maximum production of the things the United States and its Allies need most, as determined by the Requirements Committee and the Claimant Agencies.
Reporting to the Director General for Operations is a Deputy Director General for Field Operations under whose direction the regional and district offices of the War Production Board handle all problems that can be handled on a local or regional scope.
It is apparent from the precedihg description of the present organization, and how it was developed as the problems of war production increased in urgency and complexity, that WPB cannot become static organizationally. It will continue to be adjusted as the problems with which it is faced change. The only thing that is certain as the United States goes into its second year of war is that the pledge of the President and the people to make America the arsenal of democracy will be fulfilled.
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WAR PRODUCTION BOARD
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