by John Keegan
Japan was even more vulnerable to economic strangulation than Germany, and in its last weeks of war-making it was brought almost to that point. Its shipping stock had by then been reduced by sinkings, largely the work of American submarines, to 12 per cent of the pre-war stock, a desperate state of affairs for a country which depended not only on food imports to survive but also on inter-island movement to operate as an organised state. Japan had, of course, largely been motivated to war, at least at the objective level, by economic calculation. Its home population (excluding that of Korea and Manchuria) of about 60 million was too large to be supported by domestic agriculture (which supplied only 80 per cent of consumption), and it was the lure of Chinese rice as much as anything else which tempted the army to open its general offensive into mainland China in 1937. After the effective defeat of Chiang Kai-shek in 1938, most Japanese military activity in China took the form of ‘rice offensives’, forays into the rural districts designed to capture supplies at harvest time, which continued until the institution of the major Ichi-Go operation in 1944. However, since Japan was a rapidly industrialising nation, it needed not only rice but also ferrous and non-ferrous metals (both ores and scrap), rubber, coal and, above all, oil. In 1940 the supply of iron ore from domestic resources was only 16.7 per cent of demand, of steel 62.2 per cent, of aluminium 40.6 per cent, of manganese 66 per cent, of copper 40 per cent. All supplies of nickel, rubber and oil were imported, and although Japan produced 90 per cent of its own coal it had no reserves of coking coal which is essential for steel production. The government might, of course, have resolved to pursue a policy of exchange through trade; but the world slump, and protectionist measures imposed by Western importing nations as a result, so reversed the terms of trade that progressively more militarist Japanese cabinets set their face against the reduction of domestic living standards that a merely commercial approach to the acquisition of essential resources would have entailed. When the United States began to impose embargoes on strategic exports to Japan during 1940, and encouraged the British and Dutch to do likewise, the army-dominated cabinet rapidly decided on making a surprise attack.
In practice the capture of the ‘southern area’ – Malaya, Burma and the East Indies – yielded a much lower economic return than the Tojo cabinet anticipated. Imports of raw rubber, for example, which stood at 68,000 metric tons in 1941, declined to 31,000 in 1942, reached 42,000 in 1943 but declined again to 31,000 in 1944, largely as a result of the American submarine campaign, which also progressively curtailed imports of coal, iron ore and bauxite. The effect on Japanese industrial production was direct and proportional; although the Japanese aircraft industry sustained a remarkable increase in output between 1941 (= 100) and 1944 (= 465), as did the naval ordnance factories (1941 = 100, 1944 = 512), the output of motor vehicles in the same period declined by two-thirds. There were significant increases in the launching of naval and merchant ships, which respectively doubled and quadrupled; but as sinkings exceeded launchings the effort was more than nullified. The Japanese gross national product overall grew by a quarter between 1940 and 1944; government war expenditure, however, increased fivefold during the same period and eventually represented 50 per cent of GNP, thus stifling non-military production and leading to a harsh curtailment of civilian consumption. The end result of the war effort was to leave Japan with a population on the brink of starvation, though with a significantly enlarged workforce of trained engineering operatives. In the era of post-war economic revival, that workforce would win for Japanese products the overseas markets the denial of which had provoked Japan to aggression in the first place.
Britain’s war effort
Britain, the other great island combatant, had also been threatened with economic strangulation by means of an enemy submarine force. It was even more dependent than Japan upon imports for food, since a century-old policy of utilising cheap shipments from America, Canada, Australasia and Argentina had depressed farming to a level where only half of consumption was met from domestic resources. It was wholly self-sufficient in coal and partially so in ferrous ores; but it depended upon foreign supply for all its oil and rubber and most non-ferrous metals. Moreover, though equal to Germany as the second greatest industrial power in the capitalist world, it imported certain vital products such as chemicals and machine-tools. The war effort it had imposed upon itself, moreover, particularly in 1940-1 when it bore the burden of confronting the Axis alone, could not be sustained out of domestic revenue. In order to pay for the fighters which won the Battle of Britain, the escorts which fought the Battle of the Atlantic and the merchant ships sunk in it, and the tanks which contested the issue with Rommel in the western desert, Britain was obliged to liquidate almost the whole of its overseas holdings of capital, an economic sacrifice which would require fifty years of effort to restore.
Had Germany deployed at the outset of the war the force of 300 U-boats which Dönitz had advised Hitler was necessary to win the Battle of the Atlantic, Britain would surely have collapsed as a combatant long before events in the Pacific brought about the United States’ entry. Fortunately Dönitz did not achieve the deployment of that number until 1943, when the balance of forces between the Axis and its enemies had already altered to Hitler’s fatal disadvantage. In the interim, as the result of the most ruthless imposition of centralised direction attempted by any country other than the Soviet Union, British industry had achieved a remarkable surge in output of war material. For example, the number of tanks produced increased from 969 in 1939 to 8611 in 1942, the number of bombers from 758 in 1939 to 7903 in 1943 and the number of bombs from 51,903 in 1940 to 309,366 in 1944.
Britain also achieved remarkable advances in quality as well as quantity of equipment. Its inventiveness in the field of electronic warfare was unequalled in the world, while its pioneering development of jet-propulsion systems for aircraft led to the deployment of a jet fighter, the Gloster Meteor, to two front-line squadrons in Europe in the closing weeks of the war (although they did not engage their German equivalent, the Me 262). British aero-engine designers produced the power plant which transformed the P-51 Mustang into the most potent long-range fighter of the war. The de Havilland Mosquito proved one of the most elegant and versatile combat aircraft of the war, performing with distinction as a bomber, day and night fighter and in its reconnaissance and intruder roles. The Avro Lancaster night bomber, although approaching obsolescence by 1945, was the supreme instrument of the RAF’s strategic bombing campaign. There is little doubt, however, that the heavy emphasis placed on strategic bombing led to a pronounced structural imbalance in the British war economy, absorbing as much as one-third of the nation’s war effort and the cream of its high technology. The sheer weight of British industrial effort committed to the bombing offensive meant that Britain had to turn to the United States for all its transport aircraft, many of its landing craft, vast quantities of ammunition and a large proportion of its tanks. Though British industry had produced the first tank in the First World War, British tanks in 1939-45 were notably inferior not only to their German but also their American equivalents; by 1944 all British armoured divisions were equipped with the American Sherman.
The British economy increased in size by over 60 per cent during the war; but civilian consumption declined by only 21 per cent between 1939 and 1943, about the peak of British war production, when military expenditures were consuming 50 per cent of the gross national product. The home population felt the shortfall, notably in the disappearance of all luxuries from the market and the reduction of many essentials such as fats and proteins from the rationed foodstuff allocations, together with a severe shortage of clothing. The effect of the shortfall was nevertheless disguised. Had Britain attempted to sustain its military outlay from domestic resources, its economy would have been broken. The same was true for the Soviet Union. Despite all the sacrifices made, in the extension of working hours, the liquidation of foreign and domestic capital, the reduction of living standards, the utilis
ation of marginal farming land, the substitution of ersatz for accustomed commodities, the conscription of women to the workforce (and in Britain also to the armed forces, where they formed a higher proportion than in those of any other combatant country) and a dozen other emergency measures, neither the British nor the Soviet economy could have borne the strains of war without external assistance. That outside help came from the United States.
Early in the course of his invasion of Russia, Hitler expressed regret to General Guderian that he had not heeded his warnings of the extent to which Russian exceeded German tank production. ‘Had I known they had as many tanks as that,’ he conceded, ‘I would have thought twice before invading.’ Russian tank production, 29,000 in 1944 when German tank production reached its peak at 17,800, was but one index of the degree to which the Allied war economy exceeded Germany’s in scale. It was ultimately the United States which dwarfed Germany as an industrial power, at every level, and in each category of available natural resource and manufactured product. The shortfall in British war production had been offset since March 1941 by American provisions under the Lend-Lease legislation, which allowed the recipient to acquire war material against the promise to pay after the war was over. Lend-Lease helped Britain provide military aid to the Soviet Union between June and December 1941. As soon as Germany declared war on the United States, on 11 December 1941, Lend-Lease shipments began to flow to Russia directly from America, via Vladivostok, Murmansk and the Persian Gulf.
These shipments were on an enormous scale. The Soviet Union became the beneficiary of an outpouring of aid; some of the donations, such as tanks, it did not need; some, such as aircraft, were needed – for Soviet aircraft were not of the first quality – but were not properly utilised. Although the Soviet forces preferred their own weapons, the other donations provided the Soviet Union with a high proportion not only of its war-industrial requirements but also of its means to fight. ‘Just imagine’, Nikita Khrushchev later remarked, ‘how we would have advanced from Stalingrad to Berlin without [American transport]’; at the end of the war, the Soviet forces held 665,000 motor vehicles, of which 427,000 were Western, most of them American and a high proportion the magnificent 2½-ton Dodge trucks, which effectively carried everything the Red Army needed in the field. American industry also supplied 13 million Soviet soldiers with their winter boots, American agriculture 5 million tons of food, sufficient to provide each Soviet soldier with half a pound of concentrated rations every day of the war. The American railroad industry supplied 2000 locomotives, 11,000 freight carriages and 540,000 tons of rails, with which the Russians laid a greater length of line than they had built between 1928 and 1939. American supplies of high-grade petroleum were essential to Russian production of aviation fuel, while three-quarters of Soviet consumption of copper in 1941-4 came from American sources.
Wartime Russia survived and fought on American aid. So too did wartime Britain. While British convoys were shipping eastward some £77 million-worth of equipment and raw material (equivalent, at current prices, to the annual defence budget for 1989), other British convoys, which included an increasing proportion of American ships, were bringing from across the Atlantic the means both to sustain the British civil population and armed forces and to equip the American expeditionary armies preparing to invade Hitler’s Europe. The percentage of military equipment supplied to the British armed forces from American sources in 1941 was 11.5, in 1942 16.9, in 1943 26.9 and in 1944 28.7; and the percentage of American-supplied food consumed in Britain in 1941 was 29.1, a proportion which continued at that level throughout the war.
This outpouring of aid, combined with the equipment and maintenance of armed forces which increased in size thirtyfold between 1939 and 1945, was achieved at no damage to the United States economy at all. On the contrary: though annual Federal expenditure rose from 13 billion dollars in 1939 to 71 billion in 1944, inflation was easily contained by tax increases and successful war-loan campaigns. The gross national product more than doubled during the same period, and industrial production also nearly doubled.
This achievement had a simple cause. The United States economy had been depressed since the slump and bank collapse of 1929-31, and, despite the application of Roosevelt’s New Deal policies of state-financed reflation, it had not recovered to anything like the same extent as the economies of Germany, where Hitler had run a full-blown Keynesian credit programme, or Britain, where more orthodox budgetary policies had nevertheless encouraged a mild boom during the 1930s. As a result, the American economy was both relatively and absolutely still in a depressed state in 1939. There were 8.9 million registered unemployed and the average utilisation of plant was forty hours a week. By 1944 the average utilisation of plant was ninety hours a week, there were 18.7 million more people in work than in 1939 (the 10 million excess over inducted surplus largely representing women), and the value of industrial output represented 38 per cent of national income compared to 29 per cent in 1939.
In absolute terms these figures represented an extraordinary economic surge. Relatively they spelt doom to Germany and Japan, where productivity per man-hour was respectively half and one-fifth of that in the United States. The American economy was, in short, not only much larger than that of either of its enemies. It was also greatly more efficient. As a result, from having been a negligible source of military equipment in 1939, by 1944 it was producing 40 per cent of the world’s armaments. In specific categories, output of tanks had increased from 346 in 1940 to 17,565 in 1944, of shipping from 1.5 million tons in 1940 to 16.3 million tons in 1944 and of aircraft – the most spectacular of all America’s wartime industrial achievements – from 2141 in 1940 to 96,318 in 1944.
In 1945 the United States was to find itself not only the richest state in the world, as in 1939, but the richest there had ever been, with an economy almost equal in productivity to that of the rest of the world put together. Her people too had benefited. The pathetic ‘Okies’ described in John Steinbeck’s famous novel of protest, The Grapes of Wrath, were by 1944 enjoying a middle-class standard of living from their earnings in the aircraft factories of California, whence they had emigrated from their worn-out farms in the dustbowl. Neighbours who had stuck out the depression on better land had also received their reward. If it was American factories which made the weapons which beat Hitler, it was American farmers who grew the crops to feed his enemies. Paul Edwards, before the war a New Deal worker, recalled: ‘The war was a hell of a good time. Farmers in South Dakota that I administered relief to, and gave them four dollars a week and bully beef to feed their families, when I came home they were worth a quarter of a million dollars. . . . What was true there was true all over the United States. . . . And the rest of the world was bleeding and in pain. But it’s forgotten now. World War Two? It’s a war I would still go to.’
In the final enumeration of Hitler’s mistakes in waging the Second World War, his decision to contest the issue with the power of the American economy may well come to stand first.
ELEVEN
Crimean Summer, Stalingrad Winter
It is a paradox of campaigning in Russia that, though winter destroys armies, it is the coming of spring that halts operations. The thaw, saturating the suddenly unfrozen topsoil with thirty inches of snow melt, turns the dirt roads liquid and the surface of the steppe to swamp, the rasputitsa, ‘internal seas’ of mud which clog all movement. Motorised transport buries itself above the axles in bog; even the hardy local ponies and the light panje wagons they draw flounder in the bottomless mire. In mid-March 1942 both the Red Army and the Ostheer accepted defeat by the seasons. An enforced truce descended on the Russian front until the beginning of May.
Both armies made use of it to repair the losses that winter and the fighting had inflicted. The Stavka calculated that there were 16 million men of military age in Russia and that the strength of the Red Army could be raised to 9 million in 1942; allowing for 3 million already taken prisoner and a million dead, there would st
ill be enough men to fill 400 divisions and provide replacements. Many of the divisions were pitifully weak, but a surplus was found to create a central reserve, while the evacuated factories behind the Urals had produced 4500 tanks, 3000 aircraft, 14,000 guns and 50,000 mortars during the winter months.
The Germans were also enlarging their army. In January the Ersatzheer (Replacement Army) raised thirteen divisions from new recruits and ‘comb-outs’; another nine were created shortly afterwards. For the first time women volunteers (Stabshelferinnen) were inducted to release male clerks and drivers to the infantry in January 1942, and volunteer auxiliaries (Hilfsfreiwillige) were also found among Russian prisoners, most of whom turned coat as an alternative to starvation. In this way the 900,000 losses suffered during the winter were made good, though a deficiency of 600,000 remained by April. It was concealed by maintaining divisions in existence even when their infantry strength had fallen by as much as a third; tank, artillery and horse strength had also fallen. By April the Ostheer was short of 1600 Mark III and IV tanks, 2000 guns and 7000 anti-tank guns. Of the half-million horses the army had brought to Russia, a half had died by the spring of 1942.
Hitler was nevertheless convinced that the force which remained sufficed to finish Russia off and was determined to launch his decisive offensive as soon as the ground hardened. While Stalin had persuaded himself that the Germans would strike again at Moscow – a blow he was certain would be weakened by Germany’s need to deal with a ‘Second Front’ in the west – Hitler had an entirely contrary intention. The point of the Kaiser’s final offensive into Russia in 1918 had been to take possession of its natural wealth. The wheatlands, mines and, now more important than ever, oilfields had always lain in the south. It was in that direction, into the lands beyond the Crimea, on the river Volga and in the Caucasus, that Hitler now planned to send the Panzers for the summer campaign of 1942, to recoup and add to the great economic conquests brought to Germany by the Treaty of Brest-Litovsk twenty-four years earlier.
