Business: Boom, Shortages, Taxes, War

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But the U.S. Army & Navy welcomed technical assistance only up to a certain point. They had the greatest respect for the technical ability of the few corporations they knew. But the horde across the OPM bridge were mostly strangers to the Army & Navy; their ability to produce to exacting specifications was unproved. The average officer in charge of clearing orders understandably felt safer with his regular peacetime suppliers. If Westinghouse or G.E. pulled a brody, nobody could take away his stripes for that.

Result was a pile-up of orders on the leading suppliers, while the unknowns starved. By October, 95% of the Army & Navy's dollar obligations were in the hands of 3,022 corporations, and 82.6% of that was in the hands of 100.

OPM, meanwhile, instead of the bridge it was meant to be, tended to become a mere extension of the Army & Navy gate. It was not OPM's place to overrule the Army & Navy—or so the OPMites felt, and the President, for one, did not contradict them. Meanwhile OPM generated more & more office space and paper functions for itself, and took less & less initiative. By December it was a weird, inert, complicated, self-suffocating octopus, its gently waving tentacles lined with Army & Navy rubber stamps.

Army contracts let included $17,000 for a comfort station at the Arlington National Cemetery.

The New Industry. Despite the bungling and confusion, the U.S. gave birth to a new industry in 1941. The tooling-up phase, as Knudsen had described it in 1940, was over; as he promised it would, production began.

Biggest defense industry in terms of contracts is aircraft, with $6,000,000,000. Second biggest (nearly half its orders are aircraft orders) is the automotive industry, with $5,000,000,000. Of the four biggest single contractors, two are automakers: Bethlehem Steel, $1,300 millions; G.M., $1,200 millions; Curtiss-Wright, $980 millions; Henry Ford, $925 millions. Of U.S. industry's part in defense—and vice versa—there was no more instructive example than Detroit.

Detroit led all defense industries in diversification. General Motors alone had 60 different plants, in 13 States, working on defense. Their output was $56,600,000 in the first quarter, $75,200,000 in the second, $115,900,000 in the third, $200,000,000 in the fourth. Meanwhile at Ypsilanti, Ford began to build the biggest bomber plant in the world. Chrysler completed the world's biggest tank arsenal and began turning out the first U.S. medium tanks (five a day). Packard early got into production on Merlin engines for the British; Buick, Chevrolet, Studebaker, Ford all went to work on Pratt & Whitneys; Hudson & Pontiac made Oerlikon anti-aircraft guns; everybody made something.

Most hopeful thing about all this was not the 1941 output but the fact that Detroit's best engineering brains were at last interesting themselves in war machines. Charlie Sorensen, Ford's production chief (he got vitally interested when Germany invaded his native Denmark), used to visit Ford's European plants every year and knows the history of the German production miracle. Said he last month: "Their output won't be a patch on ours."