31 See Chapter 10.
32 “The Ultimate Requirements Study,” Wedemeyer Papers (Box 76, Hoover Institution, Stanford University, Stanford, CA). See also Kirkpatrick, An Unknown Future and a Doubtful Present, 125, and Appendix 3, this volume.
33 Richard W. Stewart, American Military History, vol. 2, The United States Army in a Global Era, 1917–2003 (Washington, DC: Department of the Army, 2005), 93.
34 As noted earlier, there is no evidence that any industrialist was aware that Wedemeyer’s paper even existed in any of the key archives of the production agencies.
35 As a side note of possible interest: while going through the Wedemeyer Papers, the author found several minutes of meetings where the topic of discussion was the Victory Program (all of the meetings took place in mid to late 1942). At the beginning of each of these records is a typed list of everyone who attended: Wedemeyer is not listed on any of them, except where he had written his name on top of the others. It is surely unusual that someone would write himself in as a participant in meetings on his own record copy of the minutes, unless he was writing himself into the historical record.
36 As will be demonstrated later, the economists at the WPB knew in late 1941 almost exactly how many divisions the U.S. Army could build, transport, and maintain. They would have viewed Wedemeyer’s estimates as fanciful.
37 Wedemeyer, Wedemeyer Reports!, 74. Once again there is no trace of this supposed coordination, which one would have expected to produce voluminous correspondence, in the Wedemeyer Papers.
38 Marshall,TheWarReportsofGeneralGeorgeC.Marshall,TheUnitedStatesNews,1947:157–58. http://www.ibiblio.org/hyperwar/USA/COS-Biennial/COS-Biennial-3.html (accessed 1 October 2007).
39 Brehon Somervell, “Problems of Production in World War II,” Industrial College of the United States Archives (speech given at Fort McNair, Washington, DC, 18 November 1948).
40 In the Wedemeyer Papers there are several copies of extensive tables of allowances with detailed figures written in. However, there is no evidence that these tables found their way to the production people. More important, the tables are estimates of what it would take to supply a 2 million–and 4 million–person army; as such, they appear to be the result of the work of the Quartermaster Corps and G-4 and were assembled by Colonel Henry Aurand, because General Marshall and Colonel James Burns (special assistant to presidential adviser Harry Hopkins) directed them to prepare exactly such estimates. Since they did not give any indication of when the military wanted the items delivered, the production experts would have found them useless for planning purposes (as they did with the tables delivered from the Quartermaster Corps, which are commented on by various production experts, but which the author was unable to find in the records). They may have provided the initial building blocks for the “Consolidated Balance Sheet” produced by Stacy May, about which there will be more discussion later in this narrative.
41 A further indication that Wedemeyer’s estimates of total requirements were not expounded throughout the system.
42 Robert Sherwood, Roosevelt and Hopkins: An Intimate History (New York: Enigma Books, 2001), 133.
43 Ibid., 158.
44 Ibid., 280.
45 A detailed report on the topic (“The Army Industrial College and Mobilization Planning Between the Wars”) can be found at http://stinet.dtic.mil/oai/oai?verb=getRecord&metadataPrefix=html&identifier=ADA276612 (accessed 1 October 2007). A complete account of the IMP and the effects of its scuttling can be found in R. Elberton Smith, The Army and Economic Mobilization (Washington, DC: Office of the Chief of Military History, 1959), 119–31.
Chapter 3. The Real Victory Program
1 This memo can be found in President Roosevelt’s office safe, in the “safe file” at the FDR Library in Hyde Park, NY.
2 The exception is Louis Morton, who covered the development of Plan Dog in some detail. See Morton, Command Decisions: Germany First: The Basic Concept of Allied Strategy in World War II (Washington, DC: Center of Military History, 2000), 35; and Morton, Strategy and Command: The First Two Years (Washington, DC: Center of Military History, 1961), 81–84.
3 W. K. Hancock and M. M. Gowing, British War Economy (London: Her Majesty’s Stationery Office, 1949), 384.
4 Plan Orange eventually was overtaken by the first four Rainbow plans, which in varying degrees kept Japan as the primary enemy (particularly for the Navy) while also addressing the need for hemispheric defense against the Germans. The story of U.S. war plan development is well told in Henry G. Gole, The Road to Rainbow: Army Planning for Global War, 1934–1940 (Annapolis, MD: Naval Institute Press, 2003), and in Edward S. Miller, War Plan Orange: The U.S. Strategy to Defeat Japan, 1897–1945 (Annapolis, MD: Naval Institute Press, 2007).
5 Guyer, “The Joint Chiefs and the War Against Germany,” Section 2 (no page number). In a letter to Admiral Hart, Admiral Stark wrote, “As a start on this I sat down one early morning and drew up the twelve page rough estimate, working until two o’clock the next morning. . . . After I finished the rough notes, I then got together with my staff and we went at it day and night for about ten consecutive days. The product which no one claims is perfect is now in the hands of the President.”
6 Mitchell Simpson, Harold R. Stark: Architect of Victory. 1939–1945 (Columbia: University of South Carolina Press, 1989), 66.
7 Plan Dog Case File, FDR Library, Safe Files, Hyde Park, NY.
8 Morton, Command Decisions, 235.
9 Guyer, “The Joint Chiefs and the War Against Germany,” Section 2 (no page number).
10 Ibid.
11 Ibid.
12 Plan Dog Case File, FDR Library, Safe Files; Hyde Park, NY.
13 Ibid.
14 Ibid.
15 According to Guyer’s unpublished history, “The Joint Chiefs and the War Against Germany,” the first drafts of this document had five choices: (1) War with Japan in which we have no allies. (2) War with Japan with the British Empire and the Netherlands as allies. (3) War with Japan in which Japan is aided by Italy and we have no allies. (4) War with Germany and Italy in which Japan would not be initially involved and in which we would be allied with the British. (5) Remaining out of the war and dedicating ourselves exclusively to building up our defense of the Western Hemisphere, plus continued materiel support to Britain.
16 Ibid.
17 According to Guyer in “The Joint Chiefs and the War Against Germany,” “The Chief of Staff of the Army and the Chief of Naval Operations were therefore authorized to use these proposals as the basis for staff conversations with the British and for the future actions of the Army and Navy staffs.”
18 Simpson, Harold R. Stark, 72.
19 “United States–British Staff Conversation Report, ABC-1, March 27, 1941,” in Stephen Ross, American War Plans (Florence, KY: Routledge, 2004), 67–101.
20 Ibid., 68–69.
21 Joint Board Estimates of United States Over-All Production Requirements, FDR Library, Safe Files, Hyde Park, NY.
22 John E. Brigante, “The Feasibility Dispute: Determination of War Production Objectives for 1942–1943.” An unpublished case study by the Committee on Public Administration Cases (1950), 23.
23 Joint Board Estimates of United States Over-All Production Requirements, FDR Library, Safe Files, Hyde Park, NY.
24 FDR Library, Safe Files, Hyde Park, NY.
25 Lawrence Guyer, “The Joint Chiefs and the War Against Germany,” Section 2 (no page number).
26 See Chapter 2, 14–16.
27 The requirements tables that are located in the Wedemeyer Papers closely resemble the “Munitions Program of June 1940,” another copy of which is in the National Archive’s War Production Board Records (RG 179.2.1). These tables were prepared at the direction of Colonel James Burns, although they had been modified over the intervening year as new appropriations were approved by Congress.
28 Time, 1 June 1942. A copy can be found at http://www.time.com/time/magazine/article/0,9171,790519,00.html (accessed 1
October 2007).
29 Smith, The Army and Economic Mobilization, 130.
30 Industrial College of the Armed Forces, Industrial Mobilization for War, 130. It was while working on this committee that Burns both got to know the key production experts and to understand their requirements from the military in regards to planning documents.
31 Memo from Burns to Assistant Secretary of War Johnson outlining Knudsen’s request, 9 April 1941, National Archives Miscellaneous Records, RG 179.2.5.
32 See the documentation included in the “The Determination of Army Supply Requirements” (National Defense University, Washington, DC) for copies of this report and much of the associated correspondence.
33 Watson, Chief of Staff, 174.
34 Ibid., 175.
35 As mentioned earlier, the report the president received on 11 September can be found in the FDR Library, Safe Files, Hyde Park, NY. A copy of the Wedemeyer Report is in Appendix 3, this volume.
36 The estimates in the Wedemeyer Papers were actually those that Colonel Burns ordered prepared based on his overall estimates. This work was begun in June 1940 and later was continued by Colonel Aurand. There is no indication that the massive army outlined in the Wedemeyer Papers was ever translated into an estimate of munitions requirements.
37 Brigante, “The Feasibility Dispute,” 24. This appears to be the first time a table of allowance was delivered in full and was likely the expanded “Munitions Program of June 1940.”
38 Robert Nathan, “GNP and Military Mobilization,” Journal of Evolutionary Economics (April 1994), 12.
39 “The United States at War: Development and Administration of the War Program by the Federal Government.” Prepared under the auspices of the Committee of War Administration by the War Records Section, Bureau of the Budget (June 1946), 80. This document can be found at http://www.ibiblio.org/hyperwar/ATO/Admin/WarProgram/
40 SPAB began life as the National Defense Advisory Commission and was later to transition into the OPM.The history and complex evolution of the multitude of organizations created to manage the economic side of the war is well covered in Paul A. C. Koistinen’s Arsenal of World War II: The Political Economy of American Warfare, 1940–1945 (Lawrence: University Press of Kansas, 2004).
41 Nelson, Arsenal of Democracy, 129.
42 Industrial College of the Armed Forces, Industrial Mobilization for War, 134.
43 Nathan,“GNP and Military Mobilization,”and Sherwood, Roosevelt and Hopkins. Monnet, of course, has received far more acclaim and recognition as the so-called Father of the European Union.
44 Nelson, Arsenal of Democracy, 130. This is Monnet’s claim. In actuality, U.S. GDP was roughly three times the UK GDP in 1941, while installed production capacity was about four times the size of Britain’s.
45 Nathan, “GNP and Military Mobilization,” 9.
46 Sherwood, Roosevelt and Hopkins, 226.
47 There are various versions of this story with Donald Nelson and William Knudsen, among others, claiming credit for originating the term.
48 Nathan, “GNP and Military Mobilization,” 9.
49 Nelson, Arsenal of Democracy, 129–31.
50 Speech given by Robert Nathan on 25 May 1950, Publication No. L50–144, “Appraisal of the War Production Board,” Industrial War College of the Armed Forces Archives, Fort McNair, Washington, DC.
51 Nelson, Arsenal of Democracy, 131.
52 Speech to the Foreign Policy Association, “The Production Line of Defense,” 25 October 1941. A copy is maintained in the Stacy May Papers at the University of Wyoming. (There is no file location available because these papers have not yet been professionally archived.)
53 According to the official history of the Civilian Production Agency this idea had already been discussed and agreed upon as early as 18 February 1941. By 8 March, Stacy May’s team was already putting together a ledger of American requirements and capabilities. This document was to be the basis of the Anglo-American Consolidated Statement that May would assemble later in the year. See Industrial College of the Armed Forces, Industrial Mobilization for War, 134–36.
54 Industrial College of the Armed Forces, Industrial Mobilization for War, 132.
55 There is some dispute on the origin of this quote, with the majority attributing it to Oscar Wilde, who wrote in The Canterville Ghost (1906), “We have really everything in common with America nowadays except, of course, language.” See http://www.gutenberg.org/etext/14522 (accessed 7 December 2009).
56 Hancock and Gowing, British War Economy, 385.
57 Ibid., 386.
58 Nelson, Arsenal of Democracy, 133.
59 Ibid., 385.
60 Ibid., 136.
61 Ibid., 133.
62 A 4 December 1941 memorandum from Stacy May to Donald Nelson called for the average of all military requirements to be doubled: Records of the Office of War Production, National Archives, RG 179.1. See Chapter 7, this volume, for a detailed analysis for the reasoning behind this memorandum.
63 Industrial College of the Armed Forces, Industrial Mobilization for War, 140.
Chapter 4. The Economist’s War
1 Editorial, New Republic, 14 September 1945.
2 None of the major histories of World War II written in the past twenty years mentions Stacy May, Simon Kuznets, or Robert Nathan, all of whom made a contribution to victory that arguably was at least as great as the joint chiefs’ contributions.
3 Herbert Stein, “Papers and Proceedings of the Ninety-Eighth Annual Meeting of the American Economic Association,” American Economic Review 76, no. 2 (May 1986): 5.
4 John Kenneth Galbraith, The National Accounts: Arrival and Impact, Reflections of America: Commemorating the Statistical Abstract Centennial, U.S. Department of Commerce Publication Commemorating the Statistical Abstract (Washington, DC: Government Printing Office, 1980).
5 Hancock and Gowing, British War Economy, 105–6. The authors have this to say about Britain’s international financial position: “The aggregate sum of past overseas investments was less in 1939 than it had been a generation earlier; if the nation’s holdings of gold were larger, its holdings of useful foreign securities were considerably smaller.”
6 According to economic historian Richard Gardner, British gold reserves in 1940 stood at $4 billion. By mid-1941 those reserves were exhausted. See Gardner, Sterling-Dollar Diplomacy (New York: Columbia University Press, 1969), 174. British buying power was severely eroded by the precipitous depreciation of Sterling. This fall started in 1938, and Sterling had lost a fifth of its value by the time France fell. This decline continued almost uninterrupted during 1941–42. For a thorough analysis of this topic, see August Maffry, “The Depreciation of the Pound Sterling,” Finance Division, Bureau of Foreign and Domestic Commerce (1939), http://library.bea.gov/cdm4/document.php?CISOROOT=/SCB&CISOPTR=4285&REC=8&CISOSHOW=4280 (accessed 1 October 2007).
7 M. Tullius Cicero, The Orations of Marcus Tullius Cicero, transl. by C. D. Yonge (New York: Harper, 1903), 95. This quote may be an adaptation of the original, “First of all the sinews of war is money in abundance.”
8 Some economists claim that the draft was in effect a form of commandeering; however, it is an arcane argument and will not be addressed here. Furthermore, the Germans and the Japanese did make use of commandeering of the resources of conquered territories to propel their economies. However, Axis economic policy is outside the scope of this work and most economic historians now state that Japan and Germany suffered a net economic negative in dealing with their satellites and conquered territories. For in-depth discussion of this subject, refer to Tooze, Wages of Destruction, and Mark Harrison, ed., The Economics of World War II: Six Great Powers in International Comparison (Cambridge: Cambridge University Press, 1998), and Alan S. Milward, War, Economy and Society: 1939–1945 (Berkeley: University of California Press, 1977). The United States was not immune from using captured labor and other resources. In his final report on the war to Secretary of War Stimson, Marshall bo
asts about the use of 62,075,800 prisoner working days (equals about forty-five thousand full-time workers on an annual basis) to assist the war effort (Marshall, The War Reports of General George C. Marshall, 284). However, use of this and other captured resources still made up only an infinitesimal part of the American war effort.
9 Hugh Rockoff, in Harrison, The Economics of World War II, 109. This position was articulated by Secretary of the Treasury John W. Snyder in a December 1951 speech at the Industrial War College. Snyder was a former director of the office of War Mobilization and Reconversion and previously was in charge of the Defense Plant Corporation, which financed the construction of new wartime production facilities. Snyder’s speech “The Role of the Federal Reserve in Financing War” can be found at http://www.ndu.edu/library/ic1/L46–101.pdf (accessed 1 October 2007). It should be noted that Maynard Keynes’ pamphlet, “Paying for the War” (1940) also advocated using taxes as the primary funding method, as did most other economists at the time. A large collection of these writings is archived on the website for the NBER and can be accessed at http://www.nber.org/nberhistory/ (accessed 1 October 2007).
10 Secretary of the Treasury Snyder in a speech one year earlier than the one noted above to the Industrial War College, with the same title, “The Role of the Federal Reserve in Financing War,” can be found at http://www.ndu.edu/library/ic1/L46–101.pdf (accessed 1 October 2007).
11 Every economist in government had witnessed the hyperinflation in Germany, which contributed to Hitler’s rise, and hence each was predisposed to view hyperinflation as one of the worst economic disasters possible.
12 Milton Friedman and Ann Schwartz, A Monetary History of the United States: 1867–1960 (Princeton, NJ: Princeton University Press, 1971), 546–50.
13 Milton Friedman and other economists blamed the rapid wartime expansion of the monetary stock on the immediate postwar spike in inflation. See Friedman and Schwartz, A Monetary History of the United States, 546–50.
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