*** World War II econiomics -- American Arsenal of Democracy

World War II: American Arsenal of Democracy

Arsenal of Democracy
Figure 1.--The Japanese seizure of Southeast Asia after Pearl Harbor cut off America from its principal suppliers of natuarl rubber. As a stop-gap measure, old tires were collected around the country. Boy Scouts in the small town of Stevens Point, Wisconsin organized this collection drive in June 1942. Other Scouts throughout the country were doing the same. Nationwide the Scouts collected 54,000 tons of rubber. Wide World

"We have the men, -- the skill -- the wealth -- and above all the will. .... We must be the great arsenal of democracy. For us this is an emergency as serious as war itself. "

-- President Roosevelt, December 29, 1940

"The United States of America organized her land, her resources, her industry, her men to answer the distant prayers. In the greatest mobilization of strength ever known to the world, America prepares to rescue the world and to the rescue America marches."

-- NBC. Victory at Sea.

President Roosevelt first used the term "Arsenal of Democracy" on December 29, 1940 in one of his Fireside Chats, radio boradcasts, to the American people. At the time the United States was in the moiddle of an intense political debate. Many Americans understood the dangers poised by the aggresive, totalitarian powers (NAZI Germany, Fascist Italy, the Sovoet Union, amd Imperial Japan). Many other Americans were determined to stay out of what they saw as another European war and did no appreciate the danger. The President expalined the importance of supplying the people of Europe, at the time primarily Britain with the 'implements of war'. He said that the United States "must be the great arsenal of democracy". The very day he spoke, a Luftwaffe raid on London severly damaged famous buildings and churches in the city center and engulfed St. Paul's Cathedral in flames. [Gilbert, p. 356.] Hitler feared America more than any other country and hoped that Britain could be defeated before America could be mobilized or American industry could be effectiverly harnassed for the war effort. This of course was the same calculation that Germany had made two decades eralier. Neither the NAZIs or the Japanese had any idea just how effectibely American production could be converted to war production. Air Marshall Goering sneared. "The Americans only know how to make razor blades." Four years later with the Luftwaffe in tatters, Goering said he knew that the War was lost when American P-51 Mustangs appeared over Berlin escoring waves of bombers. The record of American war production is staggering and in large measure determined the outcome of the War.

American Economy

Germany in Europe exceedded the industrial power of Britain. This could have changed the whole arc of world history. But something even more important was occuring outside of Europe. The United States by the turn of the 20th century had become the greatest industrial power and the largest econmy in the world. Most Americans still lived on the farm, but the United States was bcoming an economic powerhouse beyond the dimnsions of the European powers. The United States was developin an exceedingly complex modern economy. And the issue of goverment regulation became increasinly discussed. Congress which still dominated Federal policy had passed the Interstate Commerce Act, a law regulating railroads (1887). This was followed by the Sherman Antitrust Act, a law preventing large firms from controlling a single industry through monopolies (1890). These laws were not enforced with any vigor in the 19th century. And economic theory had not yet develoed to match economiv growth. The Depression of 1893 and now the Panic of 1907, shook American decision makers. J.P. Morgan helped prevebt an economic disaster. It would be the last time an individual could do this. Republican President Theodore Roosevelt (1901-09), William Howard Taft (1909-14), and Democratic President Woodrow Wilson (1913-21) significantly expanded the previously limited Government involvement in the economy. America was not only surpassing Europe in industrial power, it was also expanding agricultural production and unlike the European powes was not only self suficient in food production, but exported food. And even more significant, the United States was evloping vast oil fields just at the time that industrial economies were making a transition from coal which had domimated the 19th century to oil which would dominate the 20th century. Part of this was the dvelopment of the internal combustion engine which would lead to whole new industries--especially cars and trucks. And America led the way. The United States did not have an imprtant arms industry when it entered World War I and no time to build one. It did have trucks which would play a major role in adding mobility to The Allies. Along with the American infantry, it playd a major role in defeating the Germans. America not only helped the Allies win thewar, but also to prevent Europe from starving after the war. The Roaring Twenties were a time of unparalleded economic expansion in America, leaving Europe behind. The American population for the first time became a majority urban population. America by the end of the 1920s not only had surpased every European country, but had an economy comparable to all of Europe combined. The stock market crash and ensuing Great Depression shocked Americans (1929). It was the most serious economic dislocation in American history. The result was massive Governent intervention in the economy--the New Deal. The New Deal had many positive accomplishments, but one of them was not ending the Depression. Contrary to popular belief, the Crash was not the true cause if the Depression. of 1929 was not a substantial cause of the Great Depression and President Roosevelt's New Deal may have actually slowed economic recovery. World War II only deepened government economy only deepened Government involvement in the economy. The American economy was damaged by the Depression, but proved to be the Aesenal of Democracy that saved democracy and Western Civilization from the nightmare Totalitarain states that emerged from socialism (Soviets, Fascists, and NAZIs).


The United States did not have a significant arms industry at the time of World War I (August 1914). And President Woodrow Wilson who fervently desired to keep America out of the War made no effort to create one. But when America entered the War (April 1917), the United States began to transform its industrial base for war. President Woodrow Wilson turned to financeer Bernbard Baruch to manageng the country's economic mobilization as chairman of the War Industries Board. That took time, but within a year had begun to produce munitioins and arms at a staggering level. This did not, however, have a major impact on the War, although American trucks from existing plants that did not have to be retooled did have an impact. Before American industry began to deliver arms in quantity, the Ameriucan Expeditionary Force (AEF) using mostly British and French arms helped crack the Western Front wide open and the Germans asked for an armistice (November 1918). Very shortly after the War, the American people soured on the War and Congress began a series of investigatioins which turned up nothing, but began calling armns manufacturers the 'Merchants of Death'. Major corporatioins turned away from arms manufaturing and Congess cut military approporiations to the bone. As a result, as Germany and Japan poured huge sums into milatary armament, America again had no substantial arms industry ot army (1930s). And the powerful Isolationist Movement with major Congessional support was detrmined to keep it thar way. Even when Hitler and Stalin launched World War II, there was no major move to rearm (September 1939). The attitide was that the British and French would contain and bleed the Germans on the Western Front from behind the Maginot Line. This illusion was shatered when the Germans launched their long awaited Western offensive and within days had reached the Channel (May 1940). Gen. George Marshall privately told President Roosevelt that if the Germans landed five divisions on the East Coast, there was nothing the U.S. Army could do to oppose them. This was when the President set the Aesenal of Democracy in motion with a call to GM Chairman Willin Knudsen. The President began using the term Arsenal of Democracy (December 1940). The mobilization of Amrican industry began on only on a limited scale. There was still no public appetite for mass mobilization. The economy was booming again and manufactuters for the first time in a decade were making real profitss selling cars, refrigerators, washing machines, and other consumer proiducts. The initial purpose was to equip the American military, but it soon became apparent that America would have to supply Britain to keep that gallant nation in the War. The mechanism was Lend Lease (March 1941). And when the Germans invaded the Soviet Union (June 1941), that nation became a major recipient of American arms and supplies. Limited mobilization changed over night when the Japanese struck Pearl Harbor (December 1941). Suddenly there was no limitation on mobilization and retooling. Arms production expanded in 1942, but as in World War I, it took about a year for the American industry to convert to military production and achieve really large numbers (1943). This relatively quick conversion was made possible by the actions the Roosevelt Administration began in 1940. By 1943 the Arsenal of Democracy was producing arms in staggering quantities for its own military and that of its allies. American arms production hugely exceeded what the Axis war planners though possible, actually more than the Americam miltary thought possible. Production reached such staggering levels that production began to be scaled back even before the War was over (late-1944).


Several individuals played a key role in creating the Arsenal of Democracy. At the top of the list has to be President Franklin Roosevelt who had the foresight to understand the German and Japanese threat, especilly the existential German, and began defense prepartions early in his administration (1930s). Next has to be Gen. George Marshall who basically over saw not only the creation of the great Army that would librerate Western Europe, but the management of the effort to arm and equip that that army and that if its allies as well. Bernard Baruch played a vital role as a key presidential adviser. Not as important as in World War I because of his age, but still important. It is estimated that his policies cut 2 years off the time taken to produce vital weaponry. His ideas were implemented by Senatior and Supreme Court Justice James Byrnes who was appointed to head the Office of Economic Stabilization and the Office of War Mobilization. Chairman of General Motiors William Knudsen was the vital industry compnent of the above governent figures. President Roosevelt, at the recommendation of Baruch, asked Knudsen to come to Washington to help mobilize Anmerican industry for war. Because if the World War I experience and the desire not to be publically pilloried vas Merchants of Death again, many executives were understandably reluctant to get back back into the arms business again. Knudsen was a Republican and fierce critic of the President and New Deal. In the fast developing emergency, Knudsen agreed. He was appointed Chairman of the Office of Production Management and member of the National Defense Advisory Commission for which he received a salary of $1 per year. After Pearl Harbor, Knudsen received a commission as a lieutenant general in the U.S. Army (January 1942). There were now no limits on mobilization. He was appointed Director of Production, Office of the Under Secretary of War. He became a vital consultant and a troubleshooter for the War Department. Important individual industrials include William Boeing, Donald Douglas, Ferdinand Eberstadt, Edsel Ford, Andrew Higgins, Jesse Jones, Henry Kaiser, K.T. Keller, James Kindelberger, Donald Nelson, Harold Vance, and countless other public spirited men.

Google Biased Algorithms

We were working on this subject and using Google. The modern computer age has facilitated research. We now all heavily use Google as a research tool. We have found, however, that Google algorithms are heavily oriented to show America in as bad a way as possible. We first noticed that when reseraching war crimes. Links to supposed American war crimes were incredibly given more precedence than German and Japanese war crimes. Now when researching "American World War II 'industrialists'", eight of the top 10 links were about American business aiding the NAZIs (March 20, 2021). This is incredible given the central role American industry played in smashing the Axis. This sort if thing does not happen by accident. Google programmers are intentionally manipulating the algorithms to attempt to show that American businessmen during World War II were unpatriotic and actually aiding the Axis powers when nothing could be further from the truth. Anyone using Google should have this in mind. They of course are the same poeople who have no priblenm working with the Chinese Communists who are involved in genocide and basic suppression of Humn rights, but do not wabt to work with the U.S. military.


Freidel, Frank. Franklin D. Roosevelt: Rendezuous with Destiny (Little Brown: Boston, 1990), 710p.

Gilbert, Matin.

Kimball, Warren F., ed. Churchill and Roosevelt: The Complete Correspondence 3 vols. ( Princeton University Press, 1984). This is a remarable collection of Roosevelt and Churchill's communications. Kimball has written excellent books on both Lend-Lease Act and on the Morgenthau Plan for occupied Germany. The collection came from presidential, State Department, prime-ministerial, Foreign Office files, and even German intercepts of previously unpublished transatlantic telephone conversations.

Sawyer, L.A. and W.H. Mitchell. The Liberty Ships (Lloyd's of London Press, 1985).

Schlesinger, Arthur Jr. "The Supreme Partnership," The Atlantic Monthly (October 1984).

Schama, Simon. A History of Britain.

Sherwood, Robert E. Roosevelt and Hopkins (1948).

Trapani, Carol, "Letters cemented partnership," Poughkeepsie Journal (December 8, 2001).


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Created: January 1, 2003
Last updated: 9:51 PM 3/20/2021