Freedom's Forge (14 page)

Lockheed workers build Hudson bombers for the Royal Air Force, mid- to late 1940.
Lockheed Martin Corporation

ONE MORNING LATE
in 1939, a woman who had lived in Pittsburgh for the better part of a decade woke up to find smoke pouring up from the hills behind her house. She called the police: Was that a fire across the valley? “No, ma’am,” the desk sergeant told her. “That’s no fire, lady. Them’s the mills.”
¹
After ten years of economic depression, she had never known there were steel mills in her neighborhood. But now they
had roared to life. The first wartime orders from Britain and France had come in.

That the Allies would look to the United States for their war materiel made sense. Even after a decade of depression, America’s manufacturing base was still the world’s biggest. British and French military planners all assumed American-made planes and other equipment could help to close the gap with the Germans.

In 1938 alone, their orders would total some $350 million—with $84 million in aircraft engines.
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It was five times what the Army Air Corps was ordering. Britain’s war, and France’s, resurrected America’s aviation industry from the dead. One of the very first orders came in the spring of 1938, when a British team from the RAF flew out to Burbank, California, to tour the factory of Lockheed Aviation, now merged with the struggling Vega company. The British saw nothing they liked, and declared they would move on. The president of Lockheed-Vega, Robert Gross, was desperate. “Give me forty-eight hours,” he told the RAF. “Let me see what my engineers can come up with.” The RAF waited, and working four times around the clock flat-out, the Lockheed men came up with a “mock-up” of a long-range medium bomber modified from their civilian Super Electra airliner.
³

The British were impressed. Before flying home, they ordered two hundred. The plane would become the Lockheed-Hudson, the first American-built airplane to fly with the British air forces in World War II. The British would go on to order more than thirteen hundred of them; the Hudson would become the mainstay of RAF Coastal Command. One would guide British destroyers to the Nazi supply ship
Altmark
, freeing three hundred British prisoners and scoring Winston Churchill’s first triumph as First Lord of the Admiralty. Another would be the first aircraft to sink a German U-boat, in 1941.

Glenn Martin in Baltimore got his big order from the French in late January 1939, for 115 of what would become his version of a two-engine long-range bomber, the Martin 167 Maryland.
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The U.S. Army Air Corps showed no interest, but two months later France ordered
700 more, along with extra aircraft engines.
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From Pratt and Whitney alone, they ordered 6,000.
⁵

The French had also taken a keen interest in a scrappy little fighter plane designed and built by a Long Island plane manufacturer, Roy Grumman. His F4F Wildcat, designed for aircraft carrier use, couldn’t raise any interest from his own nation’s navy. But the French bought one hundred, and when France surrendered, the British took over the order. Not only was Grumman’s balance sheet looking a lot better. The bulldog-like fighter that would spearhead the American war effort in the Pacific at Wake Island, Midway, and Guadalcanal was itself saved from oblivion.
⁶

Meanwhile, French and British purchasing agents were ordering machine tools for their own factories, some $100 million worth, while another $138 million was spent providing machine tools for American factories to fill their orders. It was equal to the entire machine tool output of the country the previous year.

Making all these new planes and engines and tools also demanded aluminum and steel, especially steel. In 1929 American mills were annually producing close to 63 million tons. The Depression and failed New Deal years had slashed that number by more than half.
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Now in 1939 the mills were springing back to life. Ed Stettinius could walk down to a U.S. Steel foundry and watch in the near-darkness as the thin rivulets of glowing molten metal poured into the molds for steel ingots again, while in other plants huge machines spat out long red-hot sheets of rolled steel.

Thanks to Britain and France, America’s manufacturing sector showed the first flutterings of activity in a decade. Men returned to work; families gathered to open the first paycheck. Stores in Pittsburgh crammed their windows with refrigerators and radios as crowds gathered in the streets on weekends to gaze and wonder. One clothing store owner remembered a Czech miner coming with his wife, daughter, and two sons. In a thick accent, the miner said, “Fit us out with new
clothes.” None of them had seen a new shirt or pair of shoes in ten years.
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The one thing that briefly threatened this revival of industrial prosperity was the Neutrality Act. Once hostilities formally began, the delivery to belligerent nations of orders for war goods would have to cease. The British became so spooked after Munich they halted all orders. Then in November 1939, Roosevelt had pushed Congress into modifying the law to allow Britain and France to buy as much as they could pay for in cash. It wasn’t just good foreign policy, it was good business. “Cash-and-carry” lifted the last barrier to British and French rearmament from the factories of America. Total orders soared to more than $200 million.
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Then when the head of the French purchasing board, Jean Monnet (later architect of the Common Market), suggested the British and French pool their purchases of planes and other equipment, the stream of Anglo-French orders became a torrent.

In the first half of 1940, Britain and France purchased three times more airplanes and engines than they had for all of 1939. American aviation companies found themselves swamped with orders for more than 8,000 planes, and then 13,000—all this at a time when their own Army and Navy could barely scrape together enough money to order 5,000.
^10
†

The evacuation of Dunkirk marked the next turning point in America’s call to arms—the very week Knudsen arrived in Washington. The British army had left all its tanks, trucks, and field artillery pieces on the beach. Even rifles and machine guns were in desperately short supply. With a German invasion looming, Churchill confessed to one intimate that there might be fewer than seventeen tanks left in the entire British Isles.
¹¹

The most urgent need, however, was rifles. Churchill approached Roosevelt, who in turn approached General Marshall. What from the Army’s own current stores could be spared? That was the question Marshall posed to his chief of ordnance. By June 3 he had his answer. There were some 500,000 old Springfield rifles, all made during the last war and then packed away in grease. Since the Army was planning to deploy a new infantry firearm, the M-1 semiautomatic, Ordnance Chief Charles M. Wesson figured he could spare these plus 80,000 World War I—era machine guns, nine hundred 75mm guns, and 130 million rounds of ammunition without setting back the Army’s own rearmament plans.
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Marshall signed on. That still left the problem of how to get the rifles and other surplus weapons across the Atlantic. Thanks again to the Neutrality Act, the United States still could not directly turn over weapons to a wartime belligerent—not even a democratic one like Britain, with its national existence at stake. Instead, the weapons had to be turned over to an American concern that could then resell the equipment to the British. It would have to be a concern large enough not only to take over and organize the rifles and guns, but also ship them out on a timely basis.

Wesson walked out of the Munitions Building, crossed Constitution Avenue to the Federal Reserve Building, and went to the office of Knudsen’s colleague Edward Stettinius, former head of U.S. Steel. He asked Stettinius point-blank if the firm’s Export Company, which shipped iron and steel products all over the world, could handle the order. The deal would be good for U.S. Steel, as well, since the British payment for the guns would be down payment for the Army’s own order of steel plate for its tanks and new 105mm and 155mm artillery.

Stettinius was delighted to say yes. There was only one hitch. Stettinius had just submitted his resignation from U.S. Steel in order to work on the National Defense Advisory Commission. It would become effective at three o’clock that afternoon. Until then he could make some calls, he told the general, and picked up the phone. In a few minutes, he had Irving Olds, the new chairman of U.S. Steel, on the line and arranged for a meeting the next morning with General Wesson. It was Stettinius’s last act as chairman of U.S. Steel, and by far the most important.
¹³

By June 11 more than six hundred freight cars were unloading their contents at the Army docks at Raritan, New Jersey, where shifts of one thousand men each worked round the clock piling the rifles, guns, ammunition, and an assortment of TNT and smokeless gunpowder into lighters, which sailed into Gravesend Bay toward the freighter
Eastern Prince
. Back in Washington, British purchase agent Arthur Purvis signed the agreement with U.S. Steel for $36 million, which also turned out to be the price U.S. Steel Export Company paid to the U.S. Army. Two days later the
Eastern Prince
set off for Britain, arriving on June 23—the day after France surrendered. Between July 1 and August 1, another fifteen freighters ferried the remaining supplies across the Atlantic.
¹⁴

Stettinius and U.S. Steel had established a direct lifeline between America and a beleaguered Britain that was only bound to grow larger. Nor did the fall of France halt the orders from that quarter. From the new French government in exile, Jean Monnet put forward his second big idea: pooling Britain’s and Free France’s gold reserves in order to buy whatever Britain needed to defend its shores—which was now the defense of free government everywhere. Churchill spoke to the House of Commons on June 4, stating that “we will fight on the beaches until, in God’s good time, the New World, with all its power and might, steps forth to the rescue and liberation of the Old.”

By August, Churchill and Roosevelt had reached a deal to lend the Royal Navy fifty outdated American destroyers. America was committed to the survival of Britain. The rescue Churchill prayed for was under way.

Meanwhile, Knudsen was finally getting through to the Army. The answer to his persistent questions about what it needed and when came in a memo on June 13—the day before Stimson became secretary of war. It called for a one-million-man army by October 1941, and two million by January the following year. It also called for 9,000 and 18,000 new warplanes by those same dates, with a further goal of 36,000 planes by April 1, 1942.
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Together with the Navy’s appropriations for three new aircraft carriers and 4,050 additional aircraft, Marshall believed this would be just
enough to protect America’s borders from the Atlantic to the Pacific, as well as the Caribbean. South America would be on its own. As for intervening in Europe, that still belonged to the realm of fantasy, not strategy.
¹⁶

The whole buildup, Marshall estimated, would cost a whopping $11 billion—eleven times the entire defense budget in 1939.
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This was a raindrop in the Potomac compared to what wartime Washington would later spend, but that summer even the president said it was too much—he could never get an appropriation that size through Congress. Marshall bowed to reality, and the amount shrank to $7.3 billion. How the United States was going to squeeze a fully equipped modern army, navy, and air force out of that amount was anybody’s guess.

Even so, Knudsen had some numbers to work with at last. Now American industry could get to work, starting with aircraft engines.

The first meeting came on May 27 with people from Pratt and Whitney and Wright Aeronautical, the nation’s leading aircraft engine makers, as Knudsen asked for engines for more than six thousand planes.
¹⁸
Allison, a division of GM, was also there. Knudsen saw aircraft engines as crucial to the early stage of industrial mobilization, not just because they were enormously complex machines to manufacture,
^‡
but because they were the kind of war machinery he figured other industries might be able to produce with the right machine tools and training. In order for that to happen, however, two big changes in the way the government dealt with business were going to be needed.

Starting in 1933, congressional legislation had placed sharp restrictions on how much war suppliers could make on their government contracts. During the First World War, cost-plus contracts were common, meaning that the government would pay all expenses relating to making an airplane or artillery gun, in addition to a fixed fee or percentage of cost—8 percent was fairly standard. The postwar reaction against “war profiteers” led Congress and the Treasury Department to impose sharp curbs on the profit companies could make on orders larger than $25,000. They also required an advance audit to guarantee
that the company’s profit would be no more than 8 percent even before the contract was signed.
¹⁹

In addition, every government contract for a new airplane or tank or vehicle required bidding companies to pay for the production of their prototype and the new machine tools to manufacture it. No money was ever advanced, even to the winner of the bid. As one executive from Boeing put it, “There was no sound of coin in Uncle Sam’s jeans.” An aircraft maker looked at an average of a half-million-dollar investment just to enter a bid—with no guarantee of winning.
²⁰
Even if he did and problems or delays developed, the government was not above pulling the contract, leaving the company high and dry.