APPENDIX I

BACKGROUND OF MOBILIZATION: WORLD WAR I TO PEARL HARBOR

Page

A. Experience of World War I

<table><tr><td>Prototype of World War II mobilization</td><td>1</td></tr><tr><td>The Council of Defense and National Defense Advisory Commission</td><td>1</td></tr><tr><td>Procurement</td><td>2</td></tr><tr><td>Priorities</td><td>2</td></tr><tr><td>Power to commandeer</td><td>3</td></tr><tr><td>Conservation</td><td>4</td></tr><tr><td>Price control</td><td>4</td></tr><tr><td>Manpower</td><td>4</td></tr><tr><td>Transportation and communication</td><td>5</td></tr><tr><td>Additional aspects of mobilization</td><td>5</td></tr><tr><td>The War Cabinet</td><td>6</td></tr><tr><td>Mobilization by improvisation</td><td>6</td></tr></table>

B. The Interwar Period

<table><tr><td>Congressional action between wars</td><td>7</td></tr><tr><td>National Defense Act of 1920</td><td>7</td></tr><tr><td>War Policies Commission</td><td>7</td></tr><tr><td>Nye Committee</td><td>7</td></tr><tr><td>M-Day plans</td><td>8</td></tr><tr><td>Proposed methods of control</td><td>8</td></tr><tr><td>The planned "super-agency," the War Resources Board</td><td>9</td></tr><tr><td>Demise of the WRA</td><td>14</td></tr></table>

C. The National Defense Advisory Commission

<table><tr><td>World War II begins</td><td>15</td></tr><tr><td>Attack on the West</td><td>15</td></tr><tr><td>Revival of the National Defense Advisory Council</td><td>15</td></tr><tr><td>NDAC as an advisory group</td><td>16</td></tr><tr><td>Roles and cast of NDAC</td><td>16</td></tr><tr><td>No chairman</td><td>17</td></tr><tr><td>Powers of NDAC</td><td>17</td></tr><tr><td>NDAC's program</td><td>18</td></tr><tr><td>Need for an action agency</td><td>20</td></tr><tr><td>OPM: NDAC's principal successor</td><td>20</td></tr><tr><td>Evaluation of NDAC</td><td>20</td></tr></table>

APPENDIX I (Cont'd.)

Page

D. Democracy's Arsenal

<table><tr><td>Crisis in Britain</td><td>22</td></tr><tr><td>Organization of Office of Production Management</td><td>22</td></tr><tr><td>Expanding defense requirements</td><td>23</td></tr><tr><td>Manpower</td><td>26</td></tr><tr><td>Priorities and allocation of materials</td><td>26</td></tr><tr><td>Other offspring of NDAC</td><td>27</td></tr><tr><td>International economic defense</td><td>28</td></tr><tr><td>Creation of Supply Priorities and Allocating Board</td><td>28</td></tr><tr><td>Allocation of supply and priority functions</td><td>29</td></tr><tr><td>Accomplishments of SPAB</td><td>30</td></tr><tr><td>Industrial preparedness at the time of Pearl Harbor</td><td>31</td></tr></table>

<table><tr><td>E. The Lesson in Preparedness</td><td>32</td></tr></table>

APPENDIX I

<u>Background of Mobilization</u>

A. <u>Experience of World War I.</u>

<u>Prototype of World War II mobilization.</u> A look through the records of industrial mobilization in World War I gives one the feeling of having just been there, so striking are similarities to World War II. The same organization pattern in the early months of the war recurs, the same experimentation, the same rather hit-and-miss development of control mechanisms from advisory groups. The process was carried to stages of refinement in World War II not reached in the earlier mobilization. But one is almost led to believe that this was due more to the longer time that America was involved directly and to the greater extent of that involvement than to our learning basic lessons which we sought to apply. We began anew rather more than we stood upon the shoulders of our experience.

Basic was a similarity of political climate. "He kept us out of war!" had potent appeal in 1916. We still hoped it could be done in 1940; although by then we were more skeptical. Of course, history never repeats itself exactly; other factors were also at work, including differing personalities of the leading figures.

The Council of Defense and National Defense Advisory Commission. The Army Appropriation Act of August 29, 1916, raised the curtain on the organization of industrial mobilization in both wars. Section 2 ¹ provided for the establishment of a Council of Defense, composed of the Secretaries of War, Navy, Interior, Agriculture, Commerce, and Labor. The Council was authorized to nominate for Presidential appointment a seven-man Advisory Commission, each an expert in his field, to assist in planning and to provide technical information. During the months intervening before war was actually declared, the work of the Council and Advisory Commission consisted largely of conferences and discussions. ² This was in conformance with their stated purposes, which were to investigate and to make appropriate recommendations rather than to carry out programs of control. ³ However, in a prophetic pattern, the structure of wartime controls was to evolve from these advisory groups.

Committees were established within the framework of the Council as needs arose. Eventually the committee on transportation became the separate Railroad Administration; the Fuel Administration and the Food Administration emerged from other committees, as did also the Shipping

1. 39 Stat. 649. This statute was still in force in 1940 and was used by the President to reestablish the Advisory Commission to the Council of Defense.

2. Report of the War Industries Board, by Bernard M. Baruch, Chairman, (Washington, 1921) p. 20.

3. Laurence I. Radway, "The Quest for Staff Control," (unpublished MS, 1947) p. 18.

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Board and the War Trade Board. The important War Industries Board was established by way of a Munitions Standards Board and a General Munitions Board, which had been set up respectively to set standards and to coordinate purchases of the War and Navy Departments. The new board also absorbed several committees which had been created to advise on particular industries and functions. Not until March 4, 1918, was the War Industries Board brought from under the umbrella of an advisory body, given enlarged powers centering in the chairman, and provided the status of an administrative agency directly responsible to the President. In effecting this, the President depended upon his general powers as Chief Executive and Commander in Chief. Later the action was ratified under authority of the Overman Act.⁴

**Procurement.** At the beginning of World War I procurement was not only decentralized but uncoordinated. The War Department alone had five and later eight separate procurement offices; other procurement agencies each had at least one such office. Government offices bid against each other on prices, facilities and delivery. The results were sharp price rises, congestion, and chaos in industrial production.⁵ The clearance aspects of this problem were at first handled by a clearance committee of the General Munitions Board, and later by the commodity sections which had been developed as major arms of the War Industries Board. By the end of the war a start had been made on getting procurement agencies to estimate their requirements for six months or a year in advance in order to provide for more orderly production. Parallel with this, studies and suggestions were made on conversion of plants and construction of additional facilities.

**Priorities.** Probably the most characteristic feature of the scheme of wartime industrial controls was the priority system. In accordance with a usual pattern, this was worked out through extensive discussions between representatives of government and the affected industries. All orders and work were divided into five general classes: AA, A, B, C, and D, with sub-classes. By July 1, 1918, priority control was extended to all industries. At the same time a procedure was established whereby orders could be rated automatically in A-4 or below in accordance with a published list of purposes. The top series of priorities was assigned on

⁴ Report of the War Industries Board, p. 25.

⁵ Bernard M. Baruch, *American Industry in the War* (New York, 1941), p. 397. Hugh S. Johnson, Army representative on the War Industries Board, later commented in regard to his Department: "The supply system was just a cluster of jealous and ancient bureaus. They fought the exterior control of the War Industries Board at every step, even after we had contrived a plan of integration that put their men in control of practically every economic unit." *The Blue Eagle from Egg to Earth* (1935), cited in Baruch, p. 37.

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specific application to a WIB priorities committee. A companion Priori-
ties Board, with the same chairman but with high level representation
from war agencies, worked with this committee. The Priorities Board also
issued several preference lists of industries and plants for the guidance
of government agencies controlling fuel and transportation.

The power to commandeer supported other powers and "requests."
Baruch considered this "the true basis of our control of industry."⁶ The
powers stemmed from a number of legislative acts⁷ and covered a wide range
of items - industrial plants, food, fuel, supplies, transportation and
other facilities with varying degrees of direct relation to defense. When
these powers were combined with such influences as allocation of trans-
portation and denial of priority assistance they gave the Board, through
the cooperation of operating agencies of the government,⁸ a virtual "stran-
glehold on recalcitrant industries which might be minded to question its
authority."⁹

The drastic powers of government ordinarily were held in reserve;
dependence was placed on agreement. But agreements came more easily when
it was known that such powers could be exercised.¹⁰ Usually indication
of intention to use punitive measures was sufficient.¹¹

6 Baruch, op. cit., p. 389.

7 See Appendix to this report. These grants of power were usually
through permanent legislation, still available for emergency use.

8 *Report of the War Production Board*, pp. 50-51.

9 Grosvenor B. Clarkson, *Industrial America in the World War* (New York, 1923), pp. 96-97. See also *Report of the War Production Board*, pp. 72-74.

10 *Ibid.*, pp. 97-99; Pendleton Herring, *The Impact of War* (New York, 1941), pp. 173-75.

11 Clarkson, op. cit., p. 98. Clarkson illustrates the effectiveness of commandeering in extreme cases:

"On one occasion a great automobile manufacturer, who as undoubtedly of the opinion that in restricting the automotive industry the Board was acting arbitrarily and not in the true public interest, refused to comply with the 'request' for limitation of production. Having ample supplies of coal and raw materials on hand, he felt that he was independent and could do about as he pleased. He flatly refused to comply with the request. The chiarman called in a naval officer on duty with the Board, and asked him to see that the manufacturer's stores of coal were commandeered.

"'You wouldn't do that, woud you?' asked the amazed automobile
man.

"So far as I am concerned," was the answer, 'it is already done.
So far as you are concerned, it will be accomplished to-morrow morning.'

"That was enough.

(continued at bottom of next page)

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Board.¹⁴ Samuel Gompers, as labor member of the National Defense Advisory Council, called a series of conferences of organized labor and of labor and management to crystalize attitudes and gain support for the war program. Since the conciliation facilities of the Department of Labor were inadequate, a special President's Mediation Commission, headed by the Secretary of Labor, was established. This commission settled a number of disputes and in its report recommended a wartime policy toward labor which was adopted by the administration. The settlement of disputes was later carried on by the National War Labor Board (Taft-Walsh Board).

Recruitment was facilitated somewhat through the field offices of the Labor Department's United States Employment Service. The Post Office cooperated through making its stations available to bring workers and employers together. Merchant Marine recruiting was conducted through a drug store chain.

A start on employment and wage stabilization was made. The War Industries Board had moved toward establishing labor priorities. A Labor Policy Board had laid groundwork for wage stabilization, a field in which some work had already been done by an arsenals and navy yards wage commission. The Armistice cut short these efforts. Selective Service provided industrial manpower control through using occupation as a basis for deferment and, in 1918, by issuing the "Work or Fight" order.

Although some concentration was achieved through designating the Secretary of Labor as Labor Administrator, the manpower program of World War I was in general diffuse and developed in rather an elementary fashion. The war ended before shortages became general and acute, and hence before more extensive controls became mandatory.

In the fields of transportation and communication the government used direct action. The Railroad Administration took over the railroads. The Shipping Board assumed the direction of the merchant fleet. The Postmaster General was given the control and operation of all telephone and telegraph systems. The facilities of even the infant radio industry were assigned to the control of the Secretary of the Navy. The governmental power to commandeer, used as a reserve power to back up other indirect controls, here was put to direct and extensive use.

Additional aspects of mobilization were assigned to still other agencies. Food was the province of the Food Administration and the Grain Corporation. Fuel, the control of which was a potent indirect power to enforce industrial compliance with any regulation, was assigned to the Fuel Administration. Export and import control went to the Secretary of Commerce and the War Trade Board. The issuance of securities depended upon approval of a Capital Issues Committee, and war enterprises could turn to a War Finance Corporation for assistance.

14 Report of the War Industries Board, p. 82.

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**The War Cabinet.** No "superagency" was established to coordinate and direct this collection of agencies. The nearest approach to such a body was the President's "War Cabinet," composed of Messrs. Baruch (WIB), McAdoo (railroads), Hurley (shipping), Garfield (fuel), Hoover (food), and McCormick (trade). At weekly meetings with the President, these men conferred, reported progress, and suggested methods of more effective action.¹⁵ They were not organized with a secretariat nor did they act as a formal group. Nevertheless, Baruch felt that it was a very useful forum for influencing the heads of various wartime agencies to take co-ordinated action. He further strengthened such influence by keeping in close touch with Mr. Wilson and usually obtaining his concurrence in some form for each new general assertion of power.¹⁶

**Mobilization by improvisation.** With mobilization controls ranging from persuasion to commandeering, it is difficult to characterize the program succinctly. In general, however, great stress was laid upon representation and consultation of parties at interest, and upon negotiation. Powers of imposing restrictions and commandeering largely were held in reserve. Action was often experimental and late. It was a time of improvisation; although by the end of the war some of the elements of a fuller mobilization were being developed.

If victory is the sole measure, the effort was adequate. While the effort seemed large then, it was boy's work compared to that which had to be called forth a generation later. Even a minor war causes great disruptions in a nation's economy and calls forth extensive government action. A third war might well make no allowance for the inefficiencies characteristic of its predecessors nor for the time we used in deciding the best ways to gird for battle. But such thoughts were not in our minds on November 11, 1918. The world was then safe for democracy.

## B. The Interwar Period.

Relatively little productive action looking toward industrial mobilization was taken between 1918 and 1939 - productive in the sense of being used. This was a period when we seemed to believe that if we wished hard enough, the spectre of war would never really materialize. Wars could be prevented by ink and sealing wax on pacts purporting to pledge national policy. In any case, since the quest of profits was what involved nations in war, a simple denial of such opportunities would prevent needless bloodletting of American youth. A few prophets voiced their alarm - Bernard Baruch, stressing the need for a plan of mobilization approved in advance; Henry L. Stimson, warning of the goals of Japanese aggression. And although these were largely voices in the wilderness, some mobilization planning was carried on.

15 Herring, op. cit., pp. 157-8.

16 Clarkson, op. cit., p. 102.

Congressional action between wars. The recommendations of the War Industries Board for the continuation of skeleton staffs in and out of government, development of domestic sources for key materials, and maintenance of a small munitions industry in being¹⁷ were not adopted. However, the National Defense Act of 1923¹⁸ recognized part of the problem. Procurement of military supplies and related activities of the Department were concentrated under the Assistant Secretary of War. He was also charged with seeing that adequate provision was made for "the mobilization of material and industrial organization essential to war-time needs." In accordance with this responsibility there were established the Planning Branch, the Army and Navy Munitions Board and the Army Industrial College.

A decade intervened before Congress again legislated significantly in the field of mobilization planning. In 1930 a joint resolution was adopted¹⁹ which created a War Policies Commission consisting of six Cabinet members and eight legislators, four from each house of Congress. The Commission was charged with considering such things as the need for a Constitutional amendment to clarify congressional powers in war time, methods for taking the profit out of war, and, in general, "policies to be pursued in event of war." Its final report²⁰ was rather comprehensive. It favored the Constitutional amendment. Pending adoption, it recommended the enactment of legislation giving the President emergency powers to stabilize prices, to enforce acceptance of munitions orders, and to reorganize the Executive Branch. A wartime excess profits tax of 95 per cent was suggested. The Army and Navy Departments were also to be directed to conduct continuous mobilization planning, presumably in a more comprehensive fashion than they had done theretofore, and Congress was to review their progress periodically. But Congress adopted none of these recommendations.

In the mid-30's the investigation of the Nye Committee emphasized war profits and the apparent attractions of neutrality. The bill embodying committee ideas concerning mobilization²¹ failed of adoption. However, the Neutrality Act of 1935²² proclaimed to all that our industrial resources would not be available to either belligerent in future wars. The act was invoked in the Italo-Ethiopian War, and a parallel policy was followed in the Spanish Civil War. In July 1937 the Marco Polo Bridge incident launched an enlarged but undeclared Japanese war on China. By then it was becoming clearer that our neutrality policy was not seriously hindering aggression but was making the victim's

17 Report of the War Industries Board, pp. 96-98.

18 41 Stat. 758. For a fuller chronology of statutes affecting industrial mobilization see the Appendix to this report.

19 46 Stat. 825.

20 House Document 264, 72nd Congress, 1st Session.

21 H.R. 5529, 74th Congress, 1st Session.

22 49 Stat. 1081.

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defense extremely difficult. Accordingly, a Presidential finding of a state of war between Japan and China was not made and the Neutrality Act did not come into effect in that theatre. The arms embargo provision of the Act were not repealed until they had been in effect against the European belligerents for the first two months of the second World War.

**M-Day plans.** Meanwhile, with limited resources, the Planning Branch of the War Department and the Army and Navy Munitions Board had been trying to utilize the experience of World War I. Based on that experience they had constructed a positive plan for mobilization of an industrial resources should another war force that necessity upon us. The first Industrial Mobilization Plan was published in 1931. Successive revisions appeared in 1933, 1936, and 1939. Popularly known as "M-Day" plans, the first two revisions went into considerable detail. The 1939 edition was stripped down to what were considered essentials; the detail was held in unpublished form. A similarity in approach ran through all editions.

The Industrial Mobilization Plan was one of three related plans. A Protective Mobilization Plan provided for military mobilization of a million-man army upon the declaration of war, with an enlargement to four million should this become necessary. A Procurement Plan envisaged the methods whereby this force could be equipped and supplied. It was expected unutilized capacity of the industrial system would be adequate for the million-man army, but extensive conversion of industry would be necessary if the four-million-man level were reached. Accordingly, some 25,000 industrial plants had been surveyed, 10,000 of which were found suitable and earmarked for munitions production. Managements had been informed and many had been given educational orders.²³

The Industrial Mobilization Plan recognized that "the sole purpose in supervising the utilization of our national resources in war is to assure effective support for our armed forces, while protecting industry and the civilian population from unnecessary inconvenience and privilege."²⁴ The plan itself was concerned with the organization and procedural operation of that supervision.

**Proposed methods of control.** Major reliance was to be placed upon the assignment of priorities, including (a) priority classification of orders, items, facilities, or industries, (b) allocations of specific facilities, and (c) licenses, embargoes, permits, and warrants. Control of foreign trade (economic warfare) was viewed as having great importance. If prices needed to be controlled at all, they should be done so largely through the pressure of public opinion. Government corporations might

23 Civilian Production Administration, *Industrial Mobilization for War*, Vol. I (Washington, 1947), pp. 3-4.

24 *Industrial Mobilization Plan*, Revision of 1939, Senate Document No. 134, 76th Congress, 2nd Session, p. 3.

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need to be established to undertake risks which private agencies could
not be expected to assume.²⁵

The planned "super-agency," the War Resources Administration. Organizationally, the pattern of control stemmed from that of the War Industries Board of World War I and at the same time closely resembled the Army and Navy Munitions Board. In general, new organizations were to be established to handle new functions. The planners apparently thought that industry could be converted but that few government departments had that flexibility.

The core of the proposed organization was a War Resources Adminis-
tration. Its powers were centralized in an administrator responsible
directly to the President. He was to be assisted by an advisory council
composed of his chief deputies, representatives of the State and Military
Departments, and of associated war agencies. Four principal program
(coordinating) divisions were set up: Facilities, Commodities, Power and
Fuel, and Transportation. Liaison was established with other war agen-
cies. Contact with business was again to be carried on through war serv-
ice committees composed of representatives of the various affected
industries.

It was thought that other emergency administrations might be organized "as required by the circumstances.²⁶ Specifically mentioned were those dealing with public relations, selective service, finance, trade, labor, and price control. However, these were only to supplement the "key superagency," the War Resources Administration, and to be subject to its coordination. Moreover, pending their establishment WRA was to perform their functions.

The determination of military needs and actual procurement was re-
tained separately in the War and in the Navy Departments; the civilian
structure was to assure that these requirements were met while, at the
same time, protecting the nation's economy. When stated military re-
quirements exceeded the supply available, the Munitions Board was to
determine the allocation to be made between the two services.²⁷

25 *Ibid.*, pp. 3-4, 11-12. The price provision was a distinct departure from the 1936 position. That version said, "The inevitable necessity for such control measures should result in the establishment of governmental price control in the early part of any major war." (p. 11) The 1936 plan also envisaged more specifically the use of the power to commandeer. However, the use of this power "tends to place the Government in business; it should, therefore, be employed only as a last resort." (pp. 11-12)

26 *Ibid.*, pp. 10-12.

27 *Ibid.*, p. 6.

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For staffing many of the positions of influence and know-how, the planners looked to business and the Munitions Board. Accordingly it is stated that:

"The personnel to fill positions of responsibility in the War Resources Administration should be obtained from the patriotic business leaders of the nation... The staff of each of [the] coordinating divisions should include competent trained officer personnel from both the War and Navy Departments... Should there be any delay in the creation of the War Resources Administration the Army and Navy Munitions Board must assume the responsibility for such limited guidance of industrial effort as it may be qualified to assume... [It shall] transfer to the War Resources Administration, upon creation of that agency, such personnel and records of the Army and Navy Munitions Board as may be found useful in organizing the new body."²⁸

The establishment of the WRA was not supposed to be dependent upon the actual declaration of war. Rather the "War Resources Administration in skeleton form should be set up as early as practicable when an emergency is envisioned."²⁹

The War Resources Board, 1939. By the end of July 1939 Europe seemed on the verge of war. Moreover, a number of well-informed persons believed that the United States might be involved within six weeks. Here seemed to be the emergency the planners had been talking about. Yet it was felt that public opinion was too isolationist to support the establishment of a War Resources Administration. Accordingly, at a Cabinet meeting the President proposed that a War Resources Board be set up, and directed Acting Secretary of War Louis Johnson to proceed with its establishment. E. R. Stettinius, Jr. was named to select nominees. He became chairman. Four other prominent business leaders and the presidents of the Massachusetts Institute of Technology and the Brookings Institution were chosen as the other members. Nominations were cleared with the Under Secretary of State and the President.³⁰ A Joint Army-Navy press release announced that, while this board was for the present to be advisory to the Munitions Board, in case of an emergency it "would become an executive agency of the Government with broad powers similar to

28 *Ibid.*, pp. 6, 7, 14. The 1936 version stated: "As the War and Navy Departments are charged with the responsibility for the preparation of plans and policies for industrial mobilization, these two Departments will provide the trained officer personnel required to assist in the initiation and execution of these plans and policies upon the declaration of war. One officer from each Department will remain on duty in each of the control ['coordinating' in 1939 version] divisions to represent their respective Departments." p. 20.

29 *Ibid.*, p. 6.

30 Civilian Production Administration, *op. cit.*, pp. 7-8.

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(7) A War Resources Administration, for "coordinating America's productive capacity with the requirements of the Army and Navy and of the civilian population... The WRA is not to be a ministry of munitions engaged in purchasing and producing... The WRA's task should be to facilitate procurement and, where necessary, to increase productive capacity... The WRA should have power to determine sequence of importance of orders and relative importance of plant facilities, [and] to control industry by denying essential elements such as power and fuel, transportation or the importing of essential commodities to those who refuse to cooperate voluntarily."40

The WRA was to include the following divisions:

(a) A Raw Material and Manufactures Division (the War Industries Board Commodities Division, renamed);

(b) A Facilities Division (including handling problems of capital needs for expansion, as well as the usual functions);

(c) A Priorities Division;

(d) A War Trade Division (to control exports, imports and the basis of foreign purchases in this country);

(e) A Power and Fuel Division (to control allocation of coal, oil and power);

(f) A Transportation Division (including railways, truck and bus, inland waterways, ocean and coastwise shipping, air transport and pipe lines);

(g) A Research and Technology Division (conservation, improved methods, research, special training, and information on technical organizations).

The Board wished to be sure that there would be no continuation of emergency controls beyond the war period: "We recommend that wartime powers be vested in specially created wartime agencies which will be automatically demobilized when war is over. Should wartime powers be granted to existing executive or quasi-judicial agencies of the government, it will be next to impossible at the end of the war to separate the wartime from the peacetime functions of the government.

"We therefore do not recommend centralization of power in a new superagency or the delegation of power to existing peacetime agencies...

"Personnel to supervise wartime agencies can be obtained from men in civil life whose experience and records will inspire confidence and cooperation."41

40 Ibid., p. 16 and chart facing p. 10.

41 Ibid., p. 7, 8. The suggestion in the Moulton draft that existing agencies should be used where possible, to avoid duplication, was discarded.

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The report lost some of its political acceptability by certain overtones of mistrust of the New Deal and its supporters: "Adequate powers must be given to experienced executives having the confidence of industry... American industry is one of the machines upon which success or failure in war must depend and its effectiveness will depend in large measure on the choice of personnel in wartime agencies.

"The efficient conduct of war may require the temporary abandonment of some peacetime objectives of government as well as of individuals and private enterprise. The laying on the table of controversial questions of public policy is as essential as is unity of action among the different divisions of the armed services...

"No group in the body politic should hope to achieve in time of war, a position which it had not been able to obtain under peace conditions."42

The general pattern of the Industrial Mobilization Plan thus remained, although the superagency concept especially had been modified. Under the Board's proposal vital control remained in the political hands of the President. To a very substantial extent the War Resources Board had grasped the essentials of the broad structure necessary for industrial mobilization. This is demonstrated by their plan's similarity to that which was eventually hammered out over three years of "sitzkrieg," blitzkrieg, and defensive war, and which held until the Office of War Mobilization was added as a capstone.

Demise of the WRA. With the submission of its report the Board said that it felt that it had "rendered the principal service for which it was appointed." The Army and Navy Munitions Board could carry forward any additional necessary planning, in cooperation with other departments. The report concluded: "However, if it is desired that we continue to meet from time to time in an advisory relationship with the Army and Navy Munitions Board, we shall of course be happy to serve in that capacity."43

But time was not ripe. The Board was thanked effusively - but its Report was tabled.

42 Ibid., p. 3-5.

43 Ibid., p. 35.

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### C. The National Defense Advisory Commission.

**World War II begins.** The Russo-German pact cleared the way for the start of World War II. Motives differed. As their next step the Nazis wanted to conquer Poland and, at the same time, protect their Eastern flank should Great Britain and France come to Poland's aid. The Russians eyed eastern Poland and hoped to divert German expansion westward, to the mutual destruction of the Nazis and the democracies. Accordingly, as soon as arrangements crystallized, the invasion began. Poland was partitioned by the Nazis and Stalin in a matter of days.

**Attack on the West.** From the invasion of Poland until the spring of 1940 the Western front was quiet. The British did some small scale night bombing, but more characteristic was the gentlemanly silence where Maginot faced Siegfried. People spoke of the "phoney" war, hoped that Germany and the West would agree in some face-saving manner without further combat, and, best of all, believed that the chances of the United States' staying out had improved. The peripheral flare-up on the Denmark-Norway flank disturbed us; it did not shatter our hopes. But when the Nazi tank-plane teams crunched over the Low Countries and, with a brief pause at Dunkirk, proceded to envelop France, we suddenly came awake. Suppose, for example, England were to fall and the combined British and French fleets be turned against us?

Immediate defense needs therefore were to strengthen our armed forces to hold the Western Hemisphere and to supply aid to Britain to prevent its capitulation. This meant government action to assure the most effective use of our resources.

**Revival of the National Defense Advisory Council.** In the midst of the drama of Dunkirk the President activated the Advisory Commission to the Council of National Defense and his Office for Emergency Management. The OEM had been provided for by Executive Order 45 on September 8, 1939, when the President had declared a state of limited national emergency. This office was to be the point of liaison between the President and any defense establishments. McReynolds, a personal assistant of the President, was appointed his Liaison Officer for Emergency Management. OEM was destined to be the legal hook which supported successive war agencies, as well as to serve as an "incubator" to attend to their hatching and their beginning days.

For reasons that still are not completely clear, the President did not use OEM as such to establish his Advisory Commission. Perhaps a major reason was that he wanted to utilize a specific action of Congress (the Army Appropriation Act of 1916) but at the same time did not want

44 Civilian Production Administration, op. cit., p. 12.

45 Executive Order 8248.

46 Civilian Production Administration, op. cit., p. 18.

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to battle through new legislation. Using OEM would have made the battle legally unnecessary but might not have implied the same degree of congressional consent. The Council of National Defense, composed of Cabinet members, met only when the Cabinet did. Hence, in fact it was not reactivated as an entity separate from the Cabinet, and its advisory commission served in reality as direct advisers to the President. Thus the President carried out what he had indicated to the War Resources Board nine months previously was his idea of an appropriate war organization. Apparently he was still convinced that the time was not right for bold action and even less so for substantial delegations of his power.

The NDAC as an advisory group. The "advisory" part of the title of the National Defense Advisory Commission was emphasized. Nevertheless, events trod so closely on the President's heels and he began so soon to assign operating types of functions to NDAC members that one is led to believe that that was part of the intention all along. Specific responsibility for "coordination"⁴⁷ meant something beyond advice. But the anomalous status of the NDAC in the context of manifest needs⁴⁸ plagued and confused it until its disintegration.⁴⁹

Such effectiveness as the NDAC had sprung largely from sources other than its legal powers. It was far more representative - and thus more acceptable - than the War Resources Board. Its members individually had great prestige and their immediate association with the President added weight to their suggestions. Moreover, the executives whom the members of NDAC brought in to assist them were in general unusually well qualified.⁵⁰

The roles and the cast of NDAC included:

Industrial Production: William S. Knudsen, President of General Motors.

Industrial Materials: Edward R. Stettinius, Jr., Chairman of the Board, U.S. Steel Corporation.

Employment: Sidney Hillman, President, the Amalgamated Clothing Workers of America.

Farm Products: Chester C. Davis, formerly Administrator of AAA, and a Governor of the Federal Reserve Board.

Price Stabilization: Leon Henderson, formerly with NRA and TNEC and at the time a member of the Securities and Exchange Commission.

47 Rules and Regulations of the Council of National Defense, May 29, 1940, Sec. 2; 5 F.R. 2114.

48 Current needs were given recognition in the enactment of "peacetime" Selective Service and a series of other legislative acts during 1940. See Appendix to this report.

49 The internal operations of the NDAC and its organization difficulties are most fully examined in an unpublished manuscript by Laurence I. Radway, "The Advisory Commission to the Council of National Defense," 1943.

50 Civilian Production Administration, op. cit., pp. xiv, 20-21.

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Transportation: Ralph Budd, President of the C.B. & Q. Railroad
and of the American Association of Railroads.

Consumer Protection: Harriet Elliott, Professor of Political
Science, University of North Carolina.

Secretary: William H. McReynolds, Administrative Assistant to the
President and Liaison Officer for the Office of Emergency Management.

The Commission was in effect enlarged within a few weeks by the
agreed inclusion in all its meetings of Donald M. Nelson, Executive Vice
President of Sears, Roebuck & Co., who became Coordinator of National De-
fense Purchases.⁵¹ Staff divisions were added to deal with information,
research and statistics, state and local cooperation, housing, and small
business activities.

**Headless NDAC.** There was no chairman. When Knudsen asked at the first meeting at the White House, "Who's boss?" the President had shot back, "I am." With the President so busy on so many things this meant, of course, that no one provided continuing leadership to the group. Conceivably, as Secretary and Liaison Officer, McReynolds might have done so; but he chose the more modest role of recording secretary, administrative facilitator, and information channel to the White House.⁵² As might have been expected, the stresses of accommodating this heterogeneous group of forceful representatives of different sectors of the economy sometimes trained the indefinite seams of the NDAC. Such attempts as were made to achieve internal coordination were the result of the spontaneous appreciation of the members of NDAC that this was essential to the best fulfillment of their functions.

**Power of NDAC.** The NDAC soon acquired a few specific powers. There were things which had to be done and NDAC appeared to include a likely group to do them. The powers can be summarized thus:⁵³

51 Minutes of the Advisory Commission to the Council of National Defense, War Production Board, Documentary Publication No. 1 (Washington: 1946), pp. 4-5.

52 Indeed, it would have been very difficult to have picked a chairman from among the members. Nelson would have been the most acceptable, since he occupied a middle position between the representatives of business and the New Dealers on the Commission. Not until the establishment of OWM was a single man given responsibility for coordinating the range of activities encompassed by the NDAC. Then the selection was not from the ranks of either business or labor but from the political field. Byrnes as a Justice of the Supreme Court and with a distinguished career as a legislator and political associate of the President had the balance of qualities and the attributes of acceptability deemed necessary for such a job. No one man on the NDAC had these.

53 Radway, "The Advisory Commission," pp. 21-24.

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(1) Priorities. The President delegated to NDAC's Priorities Board the power given him by P.L. 671, 76th Congress to assign priority to defense contracts. The Priorities Board consisted of Knudsen, Stettinius and Henderson. Nelson served as Director of Priorities to carry out determinations.

(2) Commandeering. The President assigned to NDAC power of review over commandeering orders of the Secretary of War issued under Sec. 9 of P.L. 783, 76th Congress regarding plants of non-cooperating companies.

(3) Anti-Trust Certification. By agreement with the Department of Justice, the NDAC was authorized to certify to the Department firms eligible for exemption from the anti-trust laws in activity in the interests of defense.

(4) Contracts. The President ordered the War Department to submit important defense contracts to the Advisor on Industrial Production for his review.

(5) Defense Expenditures. Three supplemental defense appropriation acts of the 75th Congress, 3rd Session, gave NDAC the power to approve the purpose for which the Secretary of War expended the $700,000,000 involved and to recommend projects for his consideration. The site review activities of NDAC stemmed from this power.

(6) Certificates of Necessity. The Second Revenue Act of 1940 (P.L. 801, 78th Congress) allowed for rapid amortization for tax purposes of defense plants under certain circumstances. This privilege could be availed of only through NDAC's certifying as to the necessity of the plant and appropriateness of allowing tax relief.

(7) TVA Projects. Pub. Res. 95, 76th Congress authorized TVA to make purchases without regard to limitations in the TVA Act if the NDAC determined such action was in the interest of national defense.

In only one of the above cases was the grant of authority given to a single adviser; in one other case to several acting together. For the rest, the fiction of their being independent advisers was ignored and they were considered as a group.

**NDAC's program.** In terms of program NDAC ranged widely, as befitted the need. In procurement one of the first steps was to attempt to coordinate Army and Navy purchases in such a way as to make maximum use of the nation's resources, especially of unused plants and unemployed labor. Defense production was to be added to civilian production rather than

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substituted for it. The Army was reluctant to add this criterion to its contract pattern and NDAC had to remind it of the grant of power to approve or disapprove defense expenditures. A set of "General Principles Governing the Letting of Defense Contracts" was prepared. This was issued as a general guide, but was frequently circumvented by classifying jobs as "Rush" or having other emergency characteristics and insisting that conformity would result in too much delay. To get the most out of our productive capacity, Nelson stressed consolidation of purchases, standardization, and slack period timing of purchases. Utilization of small business was also pushed, but with little success.⁵⁴

**Priorities** constituted another field where conflict arose with the military. So long as production pinches were absent, this was no problem. But when capacity started to be strained on some items, e.g., aircraft engines, NDAC had to oppose the wish of the military to eliminate production for civilian use. The NDAC eventually got power to apply priorities between civilian and military needs, along the lines of the Industrial Mobilization Plan.

Activities in the raw materials field were characterized by rather close relations with the Army and Navy Munitions Board. In general, however, sights were set too low. So while at the time it looked as though a fairly satisfactory job was being done, by the end of 1940 it was clear that there were many gaps, for example, in stockpiling of essential materials and in pushing preclusive buying.

A better job was done in expanding facilities, which turned out to be so important to later production. With no power but a lot of persuasion and prestige the NDAC can be given major credit for launching a nine billion dollar expansion program.⁵⁵ This was a start but, of course, far from enough.

Important foundations were also laid in the manpower field. Hillman successfully pushed better labor-management relations and the beginnings of the Training-Within-Industry program. Part of a labor policy was developed, designed to help absorb the unemployed and to preserve the gains of the New Deal. A wage and hour stabilization program in shipbuilding and aircraft construction was started, but NDAC deferred action because of the prospective creation of the Office of Production Management.⁵⁶

54 Civilian Production Administration, op. cit., pp. 56-63.

55 Donald Nelson claimed that what got production expansion off dead center was the congressional enactment of the NDAC sponsored 5-year tax amortization plan for financing such expansion. See his *Arsenal of Democracy* (New York, 1946), pp. 106-7. The delay of several months, however, held back important commitments till almost the end of 1940.

56 Civilian Production Administration, op. cit., pp. 64-85.

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**Need for an action agency.** By the latter part of 1940 it had become very clear that the NDAC was no longer adequate for the job. While the time for thinking and planning never ends, the need for operations had come to the fore. The United States was now the acknowledged arsenal of democracy. An eleven billion dollar defense budget was in the mill. All of this spelled action. Organization had to be tailored to need. The NDAC had demonstrated that when it attempted to act by unanimity it often reached decisions very slowly. Moreover, while it had certain veto powers, it did not have positive power appropriate to action programs. All of this was widely recognized, even by members of the NDAC. Moreover, since the President had just won re-election, he may have felt more inclined to strengthen the organization for potential war.

**OPM: NDAC's principal successor. (1941)** The new organization decided upon was an Office of Production Management, still without a single head but with a Director and an Associate Director, who with the Secretaries of War and Navy were to direct defense production. This organization was to take over those portions of NDAC work concerned with priorities, purchases, materials, production, and employment. The members of NDAC were to continue to advise the President in their respective fields. But the focus of important activity had shifted. The NDAC slowly disintegrated, its constituent parts moving to the various new action agencies being set up to match more closely the tempo of the developing war.

**Evaluation of NDAC.** By way of accomplishment, the NDAC had laid the planning groundwork and begun the action toward industrial expansion, which made possible the unprecedented production of the war years that followed.⁵⁷ It had brought vital new blood into the government, including representation from important sectors of the public. It provided the nucleus for most of the subsequent war organizations, as is indicated by Chart I.

But one wonders. Could not all of this have been accomplished much sooner? Could not delays, frustrations, conflicts, lack of direction have been avoided? If so, the savings in dollars might have been astronomical, and not a few in American lives. If D-Day could have been in 1943 instead of 1944, the Iron Curtain might well hang considerably east of the Elbe. This much is sure. We cannot afford to plan on having this much time again.

One must also remember that, as in World War I, the mobilization of our industry, particularly of our aircraft industry, had been brought about in large measure by British and some French purchases on a large and growing scale. Had we operated only on our own military procurement, we should have had very little war industry in operation in 1940, and we might have lost some years in trying to build a war industry in aircraft from almost nothing. Foreign procurement today is nonexistent except for the turning over of arms under the Mutual Aid Program.

57 *Ibid.*, p. 56.

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production.⁵⁹ Employment matters also in fact moved to OPM with Hillman, although the formal ratification came later. The staff Bureau of Research and Statistics in addition followed production. OPM thus constituted a narrowing of function and a sharpening of organization. It was scarcely adequate to the task before it.

**Expanding defense requirements.** The pattern of aid to Britain crystallized in Lend-Lease. The first British estimates of their needs totaled 16 - 20 billion dollars for the two calendar years 1941 and 1942. The Americans thought that this was much too high. Accordingly, the amount was progressively reduced until a seven billion dollar figure was reached, which was appropriated.⁶⁰ Experience with our own estimates showed an opposite tendency. They never seemed to be high enough and had to be raised progressively. Not until March 1941 did the procurement agencies supply adequate, concrete figures and thus make possible the compilation of a summary statement of combined requirements. This showed a total defense program of 48.7 billion dollars, most of which, except for the Navy program, was supposed to be produced by the end of 1942. The time for "business as usual" clearly was past.⁶¹

Even this estimate was short lived. On June 22 the Nazis, with characteristic totalitarian perfidy, violated the cynical Russo-German pact which had cleared the way for the launching of World War II. It was now Russia's turn to experience the blitzkrieg. Within two days we had pledged our aid in her defense, counting on combined resources to hold and finally to defeat the Axis. United States requirements also continued to expand. Three days before Pearl Harbor a final "peacetime" report and estimate was completed. It showed a 60 billion dollar financed defense effort. However, the estimate called for more than a doubling of this figure within the same time limit, September 30, 1943. This meant de-voting half of an expanded national income for defense purposes. It also meant greatly increased control.⁶²

**Supply problems** grew throughout 1941 and a number of techniques were improvised to meet them. **Procurement** was handled similarly to the way it had been under NDAC. Nelson continued in charge, still mainly concerned with civilian type items; munitions were procured by the armed

59 Executive Order 8629, January 7, 1941. This arrangement of functions under OPM apparently was the direct act of the President shortly before OPM was announced.

Functional organization resulted in the establishment of commodity subdivisions in each of the major divisions. In an attempt to overcome confusion, the OPM was reorganized in June on a commodity basis, each major division assuming comprehensive responsibility for a group of commodities. Civilian Production Administration, op. cit., pp. 96-107.

60 Civilian Production Administration, op. cit., pp. 122-23.

61 *Ibid.*, pp. 134-35.

62 *Ibid.*, p. 140.

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until about the time of Pearl Harbor; and import controls did not become
really effective until the issuance of the War Production Board order
M-63 in the following year. In all, a 16 billion dollar facilities ex-
pansion program was started in 1941. Essentially it was a continuation
of NDAC efforts, except that during the year emphasis increased on public
financing (see Chart II) and, due to developing shortages, on conversion
rather than new construction.⁶⁷

CHART II. PRODUCTIVE FACILITY EXPANSION BY SOURCE OF FUNDS*

67 *Ibid.*, pp. 160-63, 985.

* Bureau of the Budget, *United States at War*, p. 115.

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within the government by Leon Henderson and his associates in the Office of Price Administration and Civilian Supply upon the industrial people in OPM. Perhaps Henderson's most spectacular move in this was his announcement of a program for curtailing production of automobiles, household refrigerators and home laundry equipment. He was without direct power to enforce this program, but appropriate orders followed shortly thereafter.⁷²

A movement toward general allocation of materials was a further development in the search for methods to help overcome the inadequacies of detailed priorities. The Defense Supplies Rating Plan enabled manufacturers of certain types of standardized equipment to obtain blanket priorities ahead of time on a calendar basis in accordance with their production records of the previous quarter. This feature of allocating materials in advance of the actual placing of orders was developed more fully in the Production Requirements Plan, announced four days before Pearl Harbor⁷³ and carried out by OPM's successor, WPB. Thus, in production control "the lumbering confusion of January"⁷⁴ had at least become more purposeful and resembled more a planned activity by December.

Of course the story of 1941 mobilization, like all history, was really multi-dimensional. A wide variety of problems were developing, with as many organizational answers to meet them, interacting on each other. At the time of the establishment of OPM, the remaining divisions of NDAC were transferred into the catch-all Office for Emergency Management. Gradually, most of them metamorphosed into full-blown organizations.

Other descendants of NDAC. Henderson, defense adviser on prices, stranded in an organization obviously headed for discard, began earnest maneuvers toward the establishment of a price agency separate from the NDAC. The result was the creation on April 11, 1941, of the Office of Price Administration and Civilian Supply. OPACS was empowered to "take all lawful steps necessary or appropriate" to prevent inflation and hoarding because of the emergency, to stimulate civilian production without interfering with military defense needs, and to provide for equitable distribution of residual supply to civilians.⁷⁵ The joker was that OPM rather than OPACS had the priority power, such as it was. Hence, "all lawful steps" had little real content. OPACS was largely limited to persuasion and planning. "Its price edicts were ... perfectly constitutional being solidly grounded on the right of freedom of speech."⁷⁶ It was the period of "jaw-bone" control. But its limited success in voluntary acceptance of price controls was remarkable for that reason.

72 Civilian Production Administration, op. cit., pp. 177-81, 195-97; Donald M. Nelson, *Arsenal of Democracy* (New York, 1946), pp. 223-24.

73 Civilian Production Administration, op. cit., pp. 181-84.

74 *Ibid.*, p. 141.

75 Executive Order 8734.

76 U. S. at War, pp. 56-57.

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House action the world learned that the heads of these two great states had met somewhere in the Atlantic and had agreed on a charter of principles and objectives. Upon his return the President was again disposed to spend time on industrial mobilization.

Adjustment was urgent in several areas. Friction had developed between OPACS and OPM. For one thing, they were competitors as prospective recipients of the President's enlarged priority powers, which encompassed civilian items. In carrying out its current responsibilities in the field of civilian supply OPACS told OPM how to allocate essential items not needed by the military; OPM officials disliked carrying out programs formulated by a coordinate agency. Although it was set up to assure the adequate functioning of the civilian economy, OPACS proved to be more restrictive than the industrialists of OPM. OPACS was continually pushing the OPM industrialists to work faster on conversion of industry, and to issue more L and M orders. Recognized even more widely was the need for a broad economic strategy to assure the best use of resources, which were growing ever more scarce as our own and Allied military requirements cut into civilian supplies.

Out of such varied causes the Supply Priorities and Allocations Board was born. Heads of the various agencies with primary interest were given membership on the Board and the whole was superimposed on the OPM. The Vice President, as Chairman of the Economic Defense Board, was made Chairman of SPAB and, with the Special Assistant to the President supervising the Lend-Lease Program, could speak for our export needs. The Secretaries of War and Navy represented the military programs. The Price Administrator could assure consideration of civilian and indirect defense needs, as well as broad requirements of economic stabilization. The Director General and Associate Director General provided coordination with OPM programs. Donald Nelson was appointed Executive Director,⁸⁶ while remaining as OPM Director of Priorities. In one respect he was reporting to Knudsen. In another he assumed over-all control over Knudsen and Hillman alike.

**Allocation of Supply and Priorities Functions.** The OPM received the President's enlarged priority and allocation power, subject to SPAB policies. The same Executive Order established in OPM a Division of Civilian Supply to represent civilian interests on supply and priority matters and to formulate programs for the equitable distribution of civilian materials. What remained of OPACS was made simply the Office of Price Administration.⁸⁷ In addition to remaining as Price Administrator, Henderson was appointed Director of the new OPM division and hence, was able to continue to exercise his influence on civilian production matters - again a dual capacity.

86 *Ibid.*, pp. 73-77.

87 Executive Order 8875, August 28, 1941.

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**Accomplishments of SPAB.** The dual and even triple offices at different hierarchical levels thus assumed by various officials within the same organizational complex made for too great a tangling of administrative lines to provide long-term effectiveness. Nevertheless, responsible officials with diverse ideas as to how to run the defense program were being brought together to prepare for achieving a more integrated whole.⁸⁸ At least they were brought around a table.

SPAB was directed to determine total requirements of materials and commodities, to establish policies for their fulfillment, and to make regulations governing allocations and priorities.⁸⁹ This constituted no sharp break with previous approaches. But the changes had brought new vigor. Accordingly, SPAB immediately began to attempt to refine and to make more comprehensive as well as specific, the estimates on requirements. Where military calculations of material seemed out of line, civilian judgment was substituted.⁹⁰ Among other actions taken during SPAB's regime were limitations on metal-consuming industries, early implementation of the Moscow Protocol, under which materials were to be furnished to Russia,⁹¹ as well as a wide variety of policy actions on all major phases of defense mobilization.⁹²

88 U. S. at War, pp. 78-79; Civilian Production Administration, op. cit., pp. 111-13.

89 Executive Order 8875.

90 U. S. at War, pp. 80-82.

91 Secretary of the Navy Knox frequently objected to these allocations, generally on grounds that they were not adequately justified. See Minutes of the Supply Priorities and Allocations Board, U.S. War Production Board Documentary Publication No. 3, pp. 31, 32, 33, 66.

At a later date in the War Production Board (1944-1945), this role of objector to blanket and unsupported Russian demands was filled almost entirely by the Office of Civilian Requirements in the Board, though with little effect. It is noteworthy that very high military priorities were assigned to Russian items of a "reconversion" nature when no reconversion priorities could get any consideration for the United States itself. Some of these items continued to be delivered to Russia as late as 1948, and, in a few instances, 1949. (Statement of the Vice Chairman of the War Production Board of this period. W.Y.E.)

92 Minutes of SPAB, passim; U.S. at War, pp. 79-84.

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Industrial preparedness at the time of Pearl Harbor. Such was the state of our defense effort on the brink of our entry into the war. In terms of preparedness we were decidedly ahead of the stage at which we entered World War I. Armaments of all types actually were being produced at a substantial rate; whereas, in World War I our allies had to furnish us many types of munitions throughout the war. Finished munitions in December 1941 were being produced at the rate of a billion dollars a month; total defense expenditures were twice that. This was small compared with what we were soon producing; but it must also be noted that plant expansion was under way, which would serve as the foundation for greatly increased output.⁹³

Organizationally, men had been brought to Washington and, in a rough school, had learned the elements of guiding a national mobilization. The structure had arisen in response to so many pressures that Topsy would surely have felt at home. Possibly there was no alternative to this. But after more than two years to make ready, and nearly three months after the President had issued his "shoot first" order and American warships had undertaken to furnish convoy protection in Western waters, we were now almost - but not quite - ready to install the wartime organization.

On such matters as increased conversion of civilian industry the OPM was still internally divided, and becoming more so rather than less.⁹⁴ In other areas, substantial bodies of opinion thought that we were moving too fast - or too slowly - toward war.⁹⁵ The bombs of Pearl Harbor abruptly interrupted our national indecision.

93 Ibid., pp. 92-94; *Problems of Mobilization and Reconversion*, First Report of the Director of War Mobilization and Reconversion, January 1, 1945.

94 Civilian Production Administration, *op. cit.*, p. 197.

95 *U. S. at War*, pp. 91-92.

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E. The Lesson in Preparedness.

In terms of preparing for industrial mobilization to fight a war, one factor is prominent in our experience of two world conflicts: The "cut-and-try" system takes a long time. While recognizing that political acts must conform to the times if they are to be effective, it may be possible to telescope the stages of preparedness.

An evaluation of the possibility of more rapid action may be facilitated by matching the major arguments for going slow, which were put forward in the last prewar period, with corresponding arguments today questioning the current validity of those arguments:

1. Public support is necessary for any mobilization action and there is usually a lack of public appreciation as to what needs to be done.

2. World War II was unprecedented in its demands. Therefore, it was necessary to experiment to find out what would work and what would not.

3. Whatever the administrative merits of mobilization plans which had been prepared, they were defective from a political point of view.

4. Executives with prestige and talent had to be recruited, tested, trained, and developed. They then had to prove themselves for top leadership. This process needs to be gone through. There is no sorting device or mechanical or even human brain which can reliably select an untested executive team. Moreover, while men of adequate talent may be in the Government, sufficient numbers of men with sufficient prestige and representativeness to mobilize a

1. It is a government responsibility to help inform the public. Given the facts, the public and its representatives can appreciate what needs to be done.

2. World War I experience could have been utilized more. In any case, the experience of World War II is readily available in the records and in the minds of those who participated in mobilization.

3. Past deficiencies need not continue. Mobilization planners should include political factors in their plans.

4. The process of selection and training of top-level war executives need not wait for the imminence of hostilities. For example, outstanding administrators can be induced to serve part-time in executive capacities or on advisory boards. The President himself might take a hand in the most important selections to assure eventual

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nation are not. Consequently, while Government might be looked to as a source for much of the staff personnel, many executives have to be brought in from outside.

5. The President cannot abdicate his Constitutional powers in delegating authority to a mobilization czar. He must retain responsibility for the key decisions in mobilization.

6. Production facilities need to be expanded to provide capacity for munitions. This process takes time.

7. Community facilities need to be expanded to match expansions or relocation of production facilities.

8. Conversion of industry should not proceed faster than the placing of orders so that men and facilities can be kept fully employed.

acceptability. Then, should mobilization become necessary, the men to run the Government would be familiar with the problems, subjected to observation as to their qualities, able and available to go to work. Since in the past two wars advisory groups have metamorphosed into defense agencies, this should not be unexpected in a third emergency.

5. While the President must retain decisive influence on the most important executive decisions, it is not unconstitutional for him to have high level assistance. Apparently OWMR was not unconstitutional.

6. Standby plants, stockpiling, Government financing, and readiness for rapid conversion of operating plants can reduce the "get ready" time.

7. Adequacy of community facilities needs to be given more attention in planning mobilization and in allocating contracts.

8. Specific orders should be ready. Also industry can be poised for conversion through such methods as educational orders and advance information and instruction.

THE LIBRARY OF CONGRESS
Legislative Reference Service

Appendix II to

Public Affairs Bulletin No. 81

Mobilization Planning and the National Security

(1950 - 1960)

by

William Y. Elliott

APPENDIX II

STATUTES AND EXECUTIVE ORDERS

ON CIVILIAN AND INDUSTRIAL MOBILIZATION

Washington, D. C.

April 1950

APPENDIX II

Page

I. Summary, 1916-1939

<table><tr><td>Army Appropriation Act of 1916, the Council of National Defense and the National Defense Advisory Commission.</td><td>1</td></tr><tr><td>The War Industries Board</td><td>1</td></tr><tr><td>Other Principal Emergency Statutes and Agencies.</td><td>2</td></tr><tr><td>The Overman Act</td><td>3</td></tr><tr><td>Statutes Granting Basic Emergency Powers Redistributable under the Overman Act.</td><td>4</td></tr><tr><td>The National Defense Act of 1920</td><td>4</td></tr><tr><td>The War Policies Commission.</td><td>5</td></tr><tr><td>The Nye Committee.</td><td>6</td></tr><tr><td>The War Resources Board.</td><td>6</td></tr></table>

II. World War II

<table><tr><td>Important Statutes through 1941.</td><td>7</td></tr><tr><td>The War Powers Acts</td><td>8</td></tr><tr><td>The Reestablished Council of National Defense.</td><td>9</td></tr><tr><td>Production</td><td></td></tr><tr><td>Office of Production Management.</td><td>10</td></tr><tr><td>War Production Board.</td><td>11</td></tr><tr><td>Office of Scientific Research and Development.</td><td>13</td></tr><tr><td>Transporation</td><td></td></tr><tr><td>Office of Defense Transportation</td><td>13</td></tr><tr><td>War Shipping Administration.</td><td>14</td></tr><tr><td>Communication</td><td></td></tr><tr><td>Defense Communications Board</td><td>15</td></tr><tr><td>Manpower</td><td></td></tr><tr><td>War Manpower Commission</td><td>16</td></tr><tr><td>National Defense Mediation Board</td><td>18</td></tr><tr><td>National War Labor Board</td><td>18</td></tr><tr><td>War Labor Disputes Act</td><td>19</td></tr><tr><td>Committee on Fair Employment Practice.</td><td>19</td></tr><tr><td>Economic Stabilization</td><td></td></tr><tr><td>Office of Price Administration</td><td>20</td></tr><tr><td>Emergency Price Control Act.</td><td>20</td></tr><tr><td>Stabilization Act</td><td>21</td></tr><tr><td>Office of Economic Stabilization and Economic Stabilization Board</td><td>22</td></tr></table>

["APPENDIX II (continued)", "Page", "Economic Warfare", "Export Control and Requisitioning Acts of 1940 . . . . . . . . . . . . .

APPENDIX II

STATUTES AND EXECUTIVE ORDERS ON
CIVILIAN AND INDUSTRIAL MOBILIZATION¹/

I. SUMMARY, 1916-1939

Section 2 of the Army Appropriation Act of August 29, 1916 (39 Stat. 649) provided for the establishment of a Council of National Defense to consist of the Secretaries of War, the Navy, the Interior, Agriculture, Commerce and Labor. Although this group was given only advisory authority, it was established "for the coordination of industries and resources for the national security and welfare" and the "creation of relations which render possible in time of need the immediate concentration and utilization of the resources of the Nation." The Act also provided that the Council would nominate for Presidential approval a seven-man Advisory Commission of experts in the fields of transportation, engineering and education, munitions and manufacturing, medicine and surgery, raw materials, supplies and labor. The Council and the Advisory Commission were authorized to engage the assistance of such advisors as were needed.

By report of those who took part,²/ the Council was able to accomplish very little of the broad task of industrial mobilization assigned to it because of its total lack of administrative power. After some months, during which the Council created various committees for the consideration of particular problems, a plan of organization did begin to evolve, however. In the early months of 1917, the Council established committees on transportation, coal, food, shipping, munitions standards, and coordination of Army and Navy munitions purchasing. The Council sought unsuccessfully to deal with the problem of shortages by the creation of many committees of manufacturers to consult with the Advisory Commission. As a next step, it created the War Industries Board, which took over the functions of the two munitions boards and gathered within its own jurisdiction the various committees advising on particular industries. The personnel of the latter ceased to be representative of industry as such and took on official capacity. The Council's resolution stated that "The Board will act as a clearing house for the war industry needs of the Government, determine the most effective ways of meeting them and the best...methods of increasing production..."

1/ A list of authorities with special attention to organization of wartime agencies. Review of administrative activity is not attempted.

2/ Report of the War Industries Board, March 1921, reprinted in Baruch, *American Industry in the War*, New York, 1941, p. 18.

- 2 -

During the second half of 1917, the Food, Fuel and Railroad Adminis-
trations, a Shipping Board and a War Trade Board were established pursuant
to acts of Congress,³/ while the War Industries Board remained a subordi-
nate of the purely advisory Council of National Defense. To give the
Board real power over the industrial life of the nation, the President
removed it from the jurisdiction of the Council and made it an agency
directly responsible to himself, with increased powers as outlined in a
letter of March 4, 1918, to Bernard Baruch, who was made Chairman. The
step was repeated in an Executive Order of May 28, 1918, after the passage
of the Overman Act.⁴/ The functions of the reorganized War Industries
Board were to be:

"(1) The creation of new facilities and the disclosing, if necessary, the opening up of new sources of supply;

(2) The conversion of existing facilities, where necessary
to new uses;

(3) The studious conservation of resources and facilities
by scientific, commercial and industrial economies;

(4) Advice to the several purchasing agencies of the Govern-
ment with regard to the prices to be paid;

(5) The determination, wherever necessary, of priorities of production of any given article to be made immediately accessible to the several purchasing agencies when the supply of that article is insufficient...;

(6) The making of purchases for the Allies."⁵/

The Chairman was given the final decision of all questions except the
determination of prices, in which he was to follow the advice of a com-
mittee consisting of himself, members of the Board directly charged with
the study of raw materials and manufactured products, the labor member,
the Chairman of the Federal Trade Commission, the Chairman of the Tariff
Commission, and the Fuel Administrator. It was also the duty of the
Chairman to guide and assist in the allocation of contracts and in ob-
taining access to raw materials, to settle competitive conflicts between
different departments in the matter of supplies, and to anticipate as
far in advance as possible the prospective needs of the several supply
departments and their adjustment to the industry of the country.⁹/

3/ See p. 3 *infra*.

4/ See p. 3 *infra*.

5/ The President's letter, quoted in the final War Industries Board report, in Baruch, *op. cit.*, p. 24.

6/ *Ibid.*, p. 25.

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(1) The National Defense Act of June 3, 1916 (39 Stat. 213), giving the President power to place orders with any company for national defense products of a kind usually produced or capable of being produced by such company. The company had to accept the order and give it precedence over all others. If the company refused to accept, on reasonable terms determined by the Secretary of War, the President could take over and operate the plant. 3/

(2) The Naval Appropriation Act of August 29, 1916 (39 Stat. 604) provided for absolute priority for the transportation of troops and war materials, when the President should demand it in wartime.

(3) The Army Appropriation Act of August 29, 1916 (39 Stat. 649) provided that the President could take possession of all transportation facilities for the moving of troops or war materials or for other emergency purposes.

(4) The Preferential Shipments Act of August 10, 1917 (40 Stat. 272) gave the President overall priorities control of transportation in the interest of national defense.

(5) The Food and Fuel Control Act of August 10, 1917 (40 Stat. 276) empowered the President to requisition food, fuel and any other supplies necessary to the Army or Navy or other public defense use, as well as storage facilities and any plant where such goods were or might be manufactured. Price fixing in the case of food and fuel was granted to the President, as well as thoroughgoing controls over coke and coal from production to rationed distribution.

The War Industries Board was terminated in November 1918. In its final report, the Board included a set of recommendations for a continuing skeleton staff, the subsidization of production of essential raw materials, and a small munitions industry capable of quick expansion. The recommendations were not adopted. 2/

The Act of June 4, 1920 (41 Stat. 759), amending the National Defense Act of 1916, in Section 5(a) placed the procurement of all military supplies and all related business of the War Department under the supervision of the Assistant Secretary of War and charged him with the responsibility of assuring "adequate provision for the mobilization of material and industrial organizations essential to war-time needs." Under this provision, the Assistant Secretary set up the Planning Branch, the Army and Navy

3/ Substantially similar provisions were made in the Naval Emergency Fund Act of March 4, 1917 (39 Stat. 1193), the Deficiency Appropriation Act of June 5, 1917 (40 Stat. 182) and the Navy Appropriation Act of July 1, 1918 (40 Stat. 720).

9/ Baruch, op. cit., p. 102 et seq.

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In 1934, a Special Senate Committee, headed by Senator Nye, conducted an investigation of munitions industries and of mobilization planning. 14/ The 1933 version of the War Department's Plan was scrutinized and subjected to criticism by the committee in its report. 15/ The committee's own mobilization bill, 16/ included provisions for more stringent restriction of war profits, a draft of essential industries, and for early termination of the Executive's wartime powers when peace returns. This bill was not adopted.

Following the Nye committee, there was no significant action taken by Congress on civilian mobilization until, in 1938, the Secretary of War was authorized to place educational orders for munitions of special design with manufacturers, to familiarize them with the production of such munitions as a precautionary measure (52 Stat. 707). 17/ In August 1939, the President appointed a War Resources Board which was to perform functions similar to those of the War Industries Board of World War I in the event of an emergency. This Board was discontinued after a few weeks except in the capacity of advisor to the Army and Navy Munitions Board. Its report to the President was not officially released until after the war though this suppression was made an issue of the 1940 Presidential campaign. 18/

14/ S. Res. 206, 73d Congress, 2d Session.

15/ Senate Report 944, 74th Congress, 2d Session.

16/ H. R. 5529, 74th Congress, 1st Session.

17/ The Neutrality Act of 1935 (49 Stat. 1081) establishing the National Munitions Control Board, dealt with munitions but not from the point of view of our own mobilization.

18/ See *New York Times*, 1940, August 27, 1:3; August 28, 1:2; October 3, 1:3; and 1947, January 21, 13:1.

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II. WORLD WAR II

Important Statutes through 1941

Along with his constitutional war powers, the President retained,
at the beginning of World War II, an impressive list of emergency powers
previously granted to him by Congress, chiefly in World War I. Examples
of such statutes are:

(1) The provision in the Act of August 29, 1916 (39 Stat. 604) that the President may demand in time of war that transportation of troops and war material have absolute priority.

(2) The provision in the same Act (39 Stat. 645) giving the President power to take control of transportation systems.

(3) The Act of March 7, 1916 (39 Stat. 36) providing that the organization of the Army below its maximum legal strength may be raised by the President up to that maximum when in his judgment an emergency makes it necessary.

(4) Various acts providing authority to take over lands and properties for military purposes. E.g., the acts of April 11, 1918 (40 Stat. 518); July 9, 1918 (40 Stat. 888); June 10, 1920 (41 Stat. 1072); March 3, 1925 (43 Stat. 1110 and 1129); June 30, 1936 (49 Stat. 1557) and August 19, 1937 (50 Stat. 696).

(5) The Act of June 19, 1934 (48 Stat. 1104), Section 606 of the Communications Act (47 U.S.C. 606), providing that in wartime the President may direct that such communications as he deems essential to the national defense be given preference by any carrier subject to the Act.

(6) The Act of June 7, 1939 (53 Stat. 811) authorizing the Secretaries of War, Navy and Interior, acting through the Army and Navy Munitions Board, to determine which materials were "strategic and critical" and what quality and quantity of such materials should be purchased and stock-piled. 19

19/ For compilations of permanent and temporary emergency legislation, see *Acts of Congress Applicable in Time of Emergency*, Public Affairs Bulletin No. 35, Washington, 1945; and two Senate Documents of the 80th Congress, 1st Session, entitled *Termination of War Controls*; *Provisions of Federal Statutes Affected by Termination of Hostilities*, the War, or Emergency. S. Doc. 5 (by the Legislative Reference Service) and S. Doc. 42 (by the Department of Justice).

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the first of these two Acts authorized the President to make such re-
distributions of functions related to war among the executive agencies
as he should deem necessary.20/ Under Title II he was permitted to
authorize any agency exercising war functions to enter into contracts
or contract revisions without regard to existing restrictions and pro-
cedures except that authority for cost-plus-a-percentage-of-cost con-
tracts was not granted. Title III gave the President complete control
of foreign exchange, and of all alien property within the jurisdiction
of the United States, and also gave him the power of censorship over all
communications between the United States and any foreign country. The
Second War Powers Act consisted of miscellaneous emergency amendments to
existing laws. Title I gave the Interstate Commerce Commission authority
to issue directions as to the equipment, service, and facilities of motor
carriers "to the extent necessary to facilitate the prosecution of the
war." Title II permitted the condemnation of any real property "declared
necessary for military, naval, or other war purposes" by the Secretaries
of War, Navy, or any other officer or agency authorized by the President.
Title III, amending the National Defense Act of June 28, 1940, extended
the priority authority to lend-lease contracts and all other contracts
and subcontracts deemed by the President to be necessary to promote the
National defense. It also authorized the President to require acceptance
and performance of such contracts and to allocate materials and facilities
in short supply.21/ Title VI removed an earlier prohibition against req-
uisitioning machinery or equipment in actual use in a factory or necessary
to its operation.

Other federal statutes of World War II related to civilian and in-
dustrial mobilization will be noted in connection with the emergency
agencies which administered them.

The year 1940 provided a parallel to organizational experience in
the pre-War Industry Board days of World War I mobilization. The com-
mittee of the cabinet known as the Council of National Defense under the
Army Appropriation Act of 1916 was reactivated. Under regulations ap-
proved by the President, its Advisory Commission was to consist of ex-
perts in appropriate fields such as industrial production, industrial

20/ The General Accounting Office was excepted. Most of the wartime agencies were established under this authority.

21/ "Whenever the President is satisfied that the fulfillment of re-
quirements for the defense of the United States will result in a
shortage in the supply of any material or of any facilities for de-
fense or for private account or for export, the President may al-
locate such material or facilities in such manner, upon such condi-
tions and to such extent as he shall deem necessary or appropriate
in the public interest and to promote the national defense."

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materials, employment, farm products, price stabilization, transportation, etc. During the course of the year, various special offices were established, such as an office for the coordination of purchasing, an office concerned with defense housing requirements, a Defense Research Committee, a Health and Medical Committee, and others. As the defense program grew, the Advisory Commission became completely decentralized if it did not cease to exist as such. Most of its specialized divisions were in time merged in newly created agencies established formally within the Office for Emergency Management.

The latter office was established on May 25, 1940, by administrative order in the Executive Office, pursuant to Executive Order 8248 of September 8, 1939, for the coordination of emergency agencies. By Executive Orders 8629 and 8632 of January 7 and 11, 1941, ten of the Advisory Commission divisions and two other agencies were placed within it. In time OEM nominally came to include nearly all the important wartime agencies. It never actually exercised an overall coordinating function, however, and was regarded as something of a fiction in other than matters of budget and accounting.

## Production

The Office of Production Management was established by Executive Order 8629 of January 7, 1941. The functions of OPM were to: (a) Formulate and execute all measures needed to increase and regulate production and the provision of emergency plant facilities, and to insure effective coordination of the Government agencies concerned; (b) Determine material requirements of defense; (c) Advise on the coordination of major defense purchases by the various departments; (d) Plan and act to insure adequate supplies of raw materials; (e) Discover present productive resources, insure their maximum use, and stimulate the creation of additional resources where needed; (f) Perform the President's functions under Section 9 of the Selective Service Act; (g) Determine priority for the delivery of material as provided in Section 2 (a) of the National Defense Act of June 28, 1940; (h) Serve in a liaison capacity between the Council of National Defense and the War and Navy Departments with respect to all defense purchasing.

Under this authority, OPM set up a Labor Division, effecting a transfer of the existing Division of Labor in OEM (formerly of the Advisory Commission) to OPM. The Director of the Labor Division was to work in cooperation with other appropriate agencies to ascertain the labor requirements of national defense, develop programs to assure an adequate trained labor supply, advise as to work standards and employment in defense industries, assist in the prevention and settlement of labor disputes, and collaborate with other divisions of OPM in labor matters.

- 11 -

The Bureau of Research and Statistics of the Advisory Commission was transferred to OPM. This was done by Executive Order 8629 also. As thus constituted, OPM included a Labor Division, a Division of Production, a Division of Purchases, a Division of Priorities, and a Bureau of Research and Statistics. In ensuing months various new divisions, sections, activities were added by OPM regulation. Also, Executive Order 8802, June 25, 1941, established within OPM a Committee on Fair Employment Practice which investigated complaints and made recommendations concerning violations of the order respecting discrimination in the defense program. Executive Order No. 8875 of August 28, 1941, created within OPM a Division of Civilian Supply to represent civilian interests involved in priorities administration. It also made OPM the coordinating center of the priority powers of all agencies, though basic priority policy was to be made by the Supply Priorities and Allocations Board, established by the same order. Under Executive Order 9024 of January 16, 1942, however, the latter agency ceased to exist and its functions were transferred to the War Production Board (successor of the OPM, as described below). Executive Order 8891 of September 4, 1941, created within OPM a Division of Contract Distribution and abolished the Defense Contract Service created five days earlier by OPM regulation. This new division had the job of developing programs for converting plants from civilian to defense production and to provide for more complete use of existing facilities through diffusion of contracts.

OPM was abolished by Executive Order 9040 of January 24, 1942, and its personnel, records, property and funds were transferred to the War Production Board which had been established on January 16 by Executive Order 9024. These two orders, in terms if not completely in practice, drew together many of the loose ends of authority in the emergency agencies. The so-called "Chairman" of the War Production Board" was placed in overall control of the nation's industrial mobilization for war, thereby furnishing a parallel to the development of the War Industries Board of War I. It became the duty of the Chairman, under these orders, to:

(1) Exercise general direction over the war procurement and production program.

(2) Determine the policies, plans, procedures, and methods of the several Federal departments, establishments, and agencies in respect to war procurement and production, including purchasing, contracting, specifications, and construction; the financing thereof; and issue such directive in respect thereto as he may deem necessary or appropriate.

(3) Perform the functions and exercise the powers vested in the Office of Production Management and the Supply Priorities and Allocations Board.

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(4) Perform the functions and exercise the authority vested in the President by Section 120 of the National Defense Act of 1916 (39 Stat. 213), concerning the placing of compulsory, precedence-taking orders with manufacturers in wartime.

(5) Report from time to time to the President on the progress of war procurement and production; and to perform such other duties as the President may direct.

Other federal agencies were to comply with the Chairman's "policies, plans and procedures," and the Joint Army and Navy Munitions Board was to report to the President through him. And further broad authority was furnished the Chairman to "exercise the powers, authority, and discretion conferred upon him by this or any other order through such officials or agencies and in such manner as he may determine; and his decisions shall be final."

Besides the Chairman, the membership of WPB was to include the Secretaries of War, the Navy, Commerce, the Lieutenant General in charge of War Department Production, the Administrator of OPA, the Chairman of the Board of Economic Welfare, and the Special Assistant to the President.

The Act of June 11, 1942 (56 Stat. 351), authorized the Chairman of WPB, through a deputy appointed by him, to mobilize the productive capacity of all small business concerns. A "Smaller War Plants Corporation," with a capitalization of 150 million dollars subscribed by the United States, headed by a five-man board of directors to be chosen by the Chairman of WPB, was also provided for in the Act. It was the power of the Corporation "(1) to make loans to small business concerns; (2) to purchase or lease land, plants, equipment, or supplies; (3) to lease or sell land, plants, equipment, or supplies to any small business concern; (4) to enter into contracts with the United States; and (5) to arrange for the performance of such contracts by subletting contracts to small business concerns."

Executive Order 9280 of December 5, 1942, provided that the Secretary of Agriculture should also be a member of the Board, and Executive Order 9335 of April 19, 1933, provided that the Chairman of the War Manpower Commission, the Director of the Office of Defense Transportation, and the Petroleum Administrator for War should be members of the Board. Finally the War Food Administrator and the Director of Contract Settlement received membership on the Board by Presidential letters of June 30, 1943, and December 9, 1944, respectively. 22/

22/ These officers and agencies are discussed *infra*.

Executive Order 9486 of September 30, 1944, transferred from the Secretaries of War and Navy to the Chairman of WPB functions with respect to non-necessity of certificates under section 124 (d) of the Internal Revenue Code (relating to the termination of the period for amortization of "emergency facilities," for purposes of the amortization deduction), Executive Order 9490 of October 20, 1944, transferred to WPB the remaining functions under section 124.

Executive Order 9368 of October 4, 1945, terminated the War Production Board and established a successor agency, the Civilian Production Administration, "to further a swift and orderly transition from wartime production to a maximum peacetime production in industry free from wartime Government controls, with due regard for the stability of prices and costs."

The Office of Scientific Research and Development was established by Executive Order 9907 of June 28, 1941. The functions of the Office were to:

(1) Advise the President as to the status of scientific and medical research relating to national defense and the measures necessary to assure its continued progress.

(2) Serve as the center for the mobilization of the scientific personnel and resources of the Nation.

(3) Coordinate, aid, and supplement where desirable, research activities relating to defense carried on by the various agencies of the Government.

(4) Initiate and support scientific research on the mechanisms of warfare and on medical problems, including such research as may be requested by the government of any country whose defense the President should deem vital to our own, under the terms of the Lend-Lease Act (55 Stat. 31).

## Transportation

Executive Order 8989 of December 18, 1941, created the Office of Defense Transportation. The duties of ODT were:

(1) To coordinate the activities of public and private agencies to adjust domestic transportation systems to the war effort.

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(2) Estimate transportation needs in the war effort, determine the adequacy of present facilities, stimulate the addition of new facilities where necessary and advise the Supply Priorities and Allocations Board (succeeded by the War Production Board) as to estimated requirements, and recommend the allocation of necessary materials.

(3) Coordinate and direct domestic traffic movements, and coordinate them with ocean shipping.

(4) Perform the functions of the President under Section 1 (15) and Section 6 (8) of the Interstate Commerce Act. (To direct the Interstate Commerce Commission to establish certain traffic priorities without resort to the normal administrative procedure of notice and hearing, etc., and the assignment of absolute preference to transportation of troops and war materials in time of war or threatened war.)

(5) Survey present, and arrange for the creation of additional, storage and warehouse facilities.

Domestic transportation was defined in the order as including railroad, motor, inland waterway, pipeline, air transport, and coastwise and intercoastal shipping. Executive Order 9156 of May 2, 1942, turned the Office with additional authority relating to transportation services relying upon rubber, and Executive Order 9214 of August 5, 1942, extended the scope of ODT's authority to include all domestic transportation within the Territories and Possessions of the United States.

Executive Order 9294 of January 6, 1943, provided that ODT should advise and assist federal, state, local and private agencies in furnishing transportation for the movement of civilian personnel related to production in the war effort and to essential civilian services. This order implemented the Act of December 1, 1942 (56 Stat. 1024), which authorized the Secretaries of War and Navy and the Chairman of the Maritime Commission to provide transportation facilities for employed or attached personnel to and from their places of employment, when adequate private and other facilities are not available and ODT has so certified.

The Office of Defense Transportation was terminated on June 30, 1949, pursuant to provisions of the Second Decontrol Act, June 4, 1948 (62 Stat. 1091).

Executive Order 9054 of January 7, 1942, established the War Shipping Administration. The order transferred to the Administrator the functions of the United States Maritime Commission with respect to the operation, purchase, charter, insurance, repair, maintenance, and requisition of vessels and the issuance of warrants with respect to

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them, and assigned to the Administration such part of the personnel of
the Maritime Commission as necessary to exercise this function. The
Administrator was authorized to:

(1) Control the purchase, use and allocation of all ocean vessels under the flag or control of the United States, except combat vessels, fleet auxiliaries, Army and Navy transports and vessels engaged in coastwise transportation under the control of the Director of the Office of Defense Transportation.

(2) Provide war risk insurance as provided in title II of the Merchant Marine Act of 1936 (49 Stat. 1985; 46 U.S.C. 1111).

(3) Establish the conditions to be complied with in receiving priorities as provided in the Act of July 14, 1941 (55 Stat. 591).

(4) Represent the U. S. Government in dealing with the shipping agencies of the allied nations.

(5) Maintain current data on shipping resources, ships in construction, and furnish such data to federal agencies concerned with the import and export of war materials.

Executive Order 9198 of July 11, 1942, placed under the War Shipping Administration the functions pertaining to the operation of the United States Maritime Service, the merchant marine cadet and cadet officer training program, and federal supervision of state marine and civilian nautical schools. These functions had been transferred from the United States Maritime Commission to the Commandant of the United States Coast Guard by Executive Order 9083 of February 27, 1942.

The Act of July 8, 1946 (60 Stat. 501), terminated the War Shipping Administration and transferred its functions to the United States Maritime Commission, effective September 1, 1946.

## Communications

The Defense Communications Board was created by Executive Order 8546 of September 24, 1940. It was composed of the Chairman of FCC, the Assistant Secretary of the Treasury in charge of the Coast Guard, the Chief Signal Officer of the Army, the Director of Naval Communications and the Assistant Secretary of State in charge of the Division of International Communications. The purpose of the Board was "to coordinate the relationships of all branches of communication to the national defense."
The Board was "basically a planning agency without operating or procurement functions" or the power of censorship.

- 16 -

The name of the Board was changed to the "Board of War Communications" by Executive Order 9183 of June 15, 1942.

By Executive Orders 8964 of December 10, 1941, and 9089 of March 6, 1942, the President assigned to the Defense Communications Board the authority vested in him under Section 606 of the Communications Act of 1934 (48 Stat. 1104). (War power to assign priority among communications on all carriers subject to the Act.)

Executive Order 9182 of June 13, 1942, creating the Office of War Information, directed the Board of War Communications, the Director of Censorship and the Director of OWI to collaborate in facilitating the broadcast of war information to foreign countries.

Executive Order 9831 of February 24, 1947, abolished the Board of War Communications and transferred its property and records to the Federal Communications Commission.

## Manpower

The War Manpower Commission was established by Executive Order 9139 of April 18, 1942. The Chairman, after consultation with members of the Commission, was directed to:

(1) Formulate plans and programs and establish basic national policies to assure the most effective mobilization and maximum utilization of the Nation's manpower in the prosecution of the war; and issue such policy and operating directives as may be necessary.

(2) Estimate the manpower requirements for industry and direct government agencies as to the proper allocation of the available manpower.

(3) Coordinate all federal programs relating to the recruitment, vocational training, and placement of workers to meet the needs of industry and agriculture.

(4) Formulate legislative programs designed to facilitate the most effective mobilization of the manpower of the country, and recommend legislation for this purpose, with the President's approval.

Executive Order 9247 of September 17, 1942, transferred to the Commission:

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The War Manpower Commission was itself terminated by Executive Order 9617 of September 19, 1945, and all of its functions were transferred to the Department of Labor, except the Procurement and Assignment Service which was transferred to the Federal Security Administrator. The order directed that the Department of Labor administer the United States Employment Service as an organizational entity.

The National Defense Mediation Board was established by Executive Order 8716 of March 19, 1941. It was composed of eleven members appointed by the President, of whom three were disinterested persons representing the public, four were representatives of employees, and four were representatives of employers. Labor disputes were to be referred to the Board whenever the Secretary of Labor certified that a controversy had arisen which "threatens to burden or obstruct the production or transportation of equipment or materials essential to national defense," except that no dispute coming within the purview of the Railway Labor Act was to be referred to the Board.

Executive Order 9017 of January 12, 1942, established the National War Labor Board, at which time the National Defense Mediation Board ceased to exist. The order provided that in the case of labor disputes which might interrupt work contributing to the effective prosecution of the war, the procedure for settlement should be as follows:

(1) The parties resorting first to direct negotiation or to procedures provided in a collective contract.

(2) If not settled in this manner, the Commissioners of Conciliation of the Department of Labor were to be notified if they had not already intervened.

(3) If not settled promptly by conciliation, the Secretary of Labor was to certify the dispute to the Board, with the Board also having discretion to take jurisdiction of the dispute on its own motion after consultation with the Secretary. After taking jurisdiction, the Board was to finally determine the dispute, using mediation, voluntary arbitration, or arbitration under rules which it should establish.

(4) The order did not apply to any dispute for which a procedure for adjustment was provided until such procedure had been exhausted.

Executive Order 9038 of January 24, 1942, provided for the appointment of associate members, representing industry, labor, and the public, to act as mediators in any labor dispute pursuant to the direction of the Board.

Executive Order 9050 of October 3, 1942, issued pursuant to the Act of October 2, 1942 (56 Stat. 765), amending the Price Control Act

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of 1942 (56 Stat. 29), extended the authority of the Board so that
no increases or decreases in wage rates could be made without its approval.

Executive Order 9328 of April 8, 1943, authorized the Board to approve increases in rates prevailing on September 15, 1942, only if such increases were necessary to eliminate substandards of living, to correct gross inequities (determined by comparison with "sound and tested going rates in the area"), to apply the Little Steel Formula, or in rare and unusual cases where necessary to aid in the effective prosecution of the war.

The War Labor Disputes (Smith-Connally) Act of June 25, 1943 (57 Stat. 166) authorized the Board to settle all disputes affecting the war effort and to order the "terms and conditions . . . governing the relations between the parties which shall be in effect until further order." NWLB operated under this broad authority for the balance of the war.

Executive Order 9617 of September 19, 1945, transferred the Board to the Department of Labor to be administered under the supervision of the Secretary. Executive Order 9672 of December 31, 1945, terminated the Board. The same order established a successor agency, the National Wage Stabilization Board.

A Committee on Fair Employment Practice was established within the Office of Production Management by Executive Order 8802, June 25, 1941. It was transferred to the War Manpower Commission by Presidential letter, effective July 30, 1942. This Committee ceased to exist upon the establishment of a new Committee on Fair Employment Practice by Executive Order 9346 of May 27, 1943. In the latter order it was provided that:

(1) All federal contracts shall contain a provision obligating the contractor not to discriminate against any employee or applicant for employment because of race, creed, color, or national origin.

(2) All federal agencies shall see that vocational and training programs for war production with which they are concerned shall be administered without discrimination.

(3) The Committee shall formulate policies to carry out the purposes of this order and make recommendations to the various Federal departments and agencies, specifically to the War Manpower Commission, appropriate measures for bringing about full utilization and training of manpower for war production without discrimination.

(4) The Committee shall receive and investigate complaints of discrimination, and may conduct hearings, makes findings of fact, and take appropriate steps to eliminate discrimination.

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Economic Stabilization

The Office of Price Administration and Civilian Supply succeeded to the functions of the Division of Consumer Protection of the National Defense Advisory Commission under Executive Order 8734 of April 11, 1941 (6 F.R. 1917), which created the new agency. Among other duties, the Order provided that the Administrator should determine and publish such maximum prices, margins, fees, etc., as he should deem fair and reasonable, "and take all lawful and appropriate steps to facilitate their observance." He was also to provide for the "equitable distribution ... among competing civilian demands" of the residual supply of materials and commodities after the satisfaction of military needs. The Administrator was offered a moderate variety of statutory provisions in which to find his enforcement power, or, rather, from which he could select particular Presidential war powers and ask that they be applied as sanctions. These statutes supplied only indirect enforcement power to the President in support of the Administrator's price regulations, though they furnished specific priority power.²⁴/²⁵

On January 30, 1942, the Emergency Price Control Act of 1942 (56 Stat. 29) "created" OPA to administer its provisions. The Administrator was given authority to establish price and rent ceilings in accordance with the policy stated in the act (generally, to prevent inflation resulting from abnormal market conditions) at certain 1941 time-price levels where practicable. He could also prohibit speculative and manipulative practices and could buy and sell and make subsidy payments to encourage production of commodities in short supply. The maximum price of agricultural commodities, however, could not be established below the highest figure obtained among four prescribed methods of computation.²⁵/ Authority was given the President to transfer any of OPA's powers with respect to particular commodities to other agencies having functions relating to the same, and vice versa, with certain

²⁴/ For example, the power to place compulsory munitions orders under pain of plant seizure (section 9 of the Selective Service Act of 1940, 54 Stat. 892, and section 120 of the National Defense Act, 50 U.S.C. 80, 39 Stat. 213) was referred to (by citation only), as were the emergency priority power over transportation (49 U.S.C. 1 [15]) and the power to requisition war materials intended for shipment abroad (54 Stat. 1090). Price regulation could be effectively enforced, however, through publicity and the withholding of material and transportation priorities, especially under the broad language of the Priorities Act (54 Stat. 676, 55 Stat. 236).

²⁵/ 110 percent of parity, the market price on a given date, the average price over a stated period, or 110 percent of a "comparable price" established by the Secretary of Agriculture for non-basic commodities when, for reasons stated, a price based on parity would not be appropriate.

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exceptions regarding agricultural commodities. Persons subject to the
Administrator's regulations, orders or price schedules could file pro-
tests within sixty days and upon the denial of such protests could file
a complaint in the Emergency Court of Appeals, created by the Act, for
the purpose of having enforcement of the regulation, etc., enjoined.
Thereafter, appeal could be had to the Supreme Court as from the circuit
Courts of Appeals, except that such an appeal was to have preference on
the Supreme Court docket. The scope of review at either level was lim-
ited to setting aside regulations, etc. which were "not in accordance
with law" or which were "arbitrary or capricious." That is, the admin-
istrative determination of fact could be overturned only for failure of
"substantial evidence," the common limitation upon judicial review of
administrative action. The Act provided a variety of enforcement tech-
niques. Criminal prosecution in the Federal District Courts for viola-
tion of regulations, orders, or price schedules could be had. The Ad-
ministrator could apply to the "appropriate" Federal, State, or
Territorial court to have violations or threatened violations enjoined.
A buyer or tenant, and when he was not so entitled, the Administrator,
could sue the seller or landlord in "any court of competent jurisdic-
tion" for $50 or treble damages for violation of a regulation, order,
or price schedule. No one could show as a defense in any of such ac-
tions the invalidity of the regulation, etc. He could test it only by
complaint in the Emergency Court of Appeals. Finally, the Administra-
tor was authorized to enforce his regulations, etc., through a licensing
system.

In Executive Order 9126 of April 7, 1942 (7 F.R. 2719), the Presi-
dent delegated to the Chairman of the War Production Board his sweeping
priority and rationing powers under title III of the Second War Powers
Act, and authorized him to delegate so much of it as he wished to the
Price Administrator. The Administrator was to have full discretion in
the exercise of power so delegated to him and also in priority and ra-
tioning power conferred upon him directly by the President. Delegations
under the enabling provision of the President's Order could find support
in Section 201(b) of the Emergency Price Control Act, supra, which has
been mentioned, as well as in the provision for redistribution of func-
tions in the First War Powers Act.

The Stabilization Act of October 2, 1942 (57 Stat. 765) amended
the Emergency Price Control Act by providing for the stabilization of
wages and salaries as well as prices and rents. The minimum price
ceilings for agricultural commodities were also lowered, or rather, the
relative purchasing power of farm income was given less room for ex-
pansion by substituting 100 percent for 110 percent of parity in one of
the alternative formulas for computing the minimum price ceiling. The
minimum agricultural price ceiling as to a given commodity could be
raised, however, to increase its production for war purposes. The highest
prices during the period of January 1, 1942, to September 1, 1942, pro-
vided the basis for the alternate method of determining the minimum

- 23 -

in this Order, or the directives on policy issued by the Director (of Economic Stabilization) under this Order." By these provisions, the Order suspended section 302(c)(1) of the Emergency Price Control Act of 1942, *supra* (prohibiting the regulation of wages and salaries), for which the President had received express authorization in the Stabilization Act of 1942, *supra*.

As to agricultural commodity prices, the Secretary of Agriculture and the Price Administrator were made jointly responsible by the Order for stabilizing prices in accordance with the Stabilization Act. The Director of OES was to resolve any conflicts between them. This judicial function vested in the Director remained as the sole exception to the general function of the Director of War Mobilization of settling disputes between agencies, later delegated to him by the President under Executive Order 9347 of May 27, 1943 (summarized below). The new statutory provisions as to minimum agricultural price ceilings had to be observed, but the Stabilization Act itself and Executive Order 9250 provided for the suspension of sections 3(a) and 3(c) of the Emergency Price Control Act to the extent that prices established under the Order should come in conflict with them.

The Price Administrator was to fix price ceilings so as to prevent profits "which in his judgment are unreasonable or exorbitant." The Order also authorized government buying and selling and subsidization as techniques of price stabilization as well as of production and distribution aid. The Director of OES could direct the Department of Agriculture with its constituent agencies, the Department of Commerce, RFC and its wartime subsidiaries, and any other federal department or agency to engage in such activities when he considered it necessary.

Finally, to further insure centralized control of stabilization policy, the Order provided that the Director could exercise his authority and discretion through such officials or agencies and in such manner as he should determine. And he could direct that any policy formulated under the Order "shall be enforced by any other department or agency under any power or authority which may be provided by any of the laws of the United States." This provision for enforcement through any useful sanction possessed by the executive branch was accompanied by one provision for the use of specific indirect sanctions. In the title devoted to wage stabilization, the Order directed all executive departments and other agencies to disregard any wage or salary paid in contravention of the Order or the Stabilization Act in determining the employer's costs for purposes of price regulation, tax deduction, public contract, or under any other law or regulation.

Executive Order 9328 of April 8, 1943, was issued for the purpose of assuring wage and price stabilization at the September 15, 1942, levels. On prices, the order directed the Price Administrator and the Food Administrator to take steps to place ceiling prices on all commodities affecting the cost of living, and to authorize no more increases in ceiling prices except to the minimum extent required by law.

- 24 -

Under Executive Orders 9280 of December 5, 1942, and 9322 of March 23, 1943, the Secretary of Agriculture and the War Food Administrator "delegated" to OPA their authority to ration foods.

Section 5 of the Act of July 16, 1943 (57 Stat. 566), limited the Price Administrator's authority in grade labeling and commodity standards in connection with price ceilings.

The Stabilization Act of 1944 (58 Stat. 632) extended the operative period of the Emergency Price Control Act and the Stabilization Act of 1942 to June 30, 1945.

## Economic Warfare

The Act of July 2, 1940 (54 Stat. 712), provided that the President may prohibit or curtail the exportation of any military equipment or munitions whenever he determines that it is necessary in the interest of national defense (p. 8 *supra*). Presidential Proclamation 2413 of July 2, 1940, and later proclamations listed such prohibited articles and vested the administration of the Act in an *Administrator of Export Control*, under Presidential regulations.

The Act of October 10, 1940 (54 Stat. 1090) gave the President authority to requisition any military equipment or munitions for the use of the United States whenever he shall determine it necessary in the interest of national defense (p. 8 *supra*). Procedure to be followed in the administration of this second Act was prescribed in Executive Order 8567 of October 15, 1940. The Act was intended to assure that materials denied export would be available for defense purposes. Under the procedure mentioned, determination as to the necessity of taking over such material or articles was to be by the joint action of the Secretaries of War and Navy through the Army and Navy Munitions Board, as was the sale or disposition of such materials. Machinery and procedure for determining fair compensation were provided in the Act.

Executive Order 8839 of July 30, 1941, established the *Economic Defense Board*, and Executive Order 8900 of September 15, 1941, transferred to the new agency the duties of the Administrator of Export Control. The Economic Defense Board was intended to develop and coordinate "policies, plans, and programs" to protect and strengthen the international economic relations of the United States in the interest of national defense. It was composed of the Vice President, the Secretaries of State, Treasury, War, Navy, Agriculture, Commerce, the Attorney General, the Chairman of WPB, the Coordinator on Inter-American Affairs, and the Lend-Lease Administrator.

Executive Order 8926 of October 28, 1941, creating the *Office of Lend-Lease Administration*, provided that the Economic Defense Board should advise the State Department in the negotiation of the master agreement with each nation receiving lend-lease aid.

Executive Order 8982 of December 17, 1941, changed the name of the Economic Defense Board to the Board of Economic Warfare.

- 26 -

of October 6, 1943, transferred to it the foreign procurement activities
of the Commodity Credit Corporation and the War Food Administration.

Executive Order 9380 provided that "the powers and functions of the
Administration shall be exercised in conformity with the foreign policy
of the United States as defined by the Secretary of State." It further
provided that "as soon as military operations permit, the Administration
shall assume responsibility for the control of all activities of the
United States Government in liberated areas with respect to supplying
the requirements of and procuring materials in such areas."

27/ (cont'd.)

Subsidiaries of RFC organized under Section 5(d) of the RFC Act (54
Stat. 573) to aid in the defense program were seven in number: The
Defense Plant Corporation, the Rubber Reserves Company, the Defense
Supplies Corporation, the Metals Reserve Company, the War Damage
Corporation, the United States Commercial Company, and the Petroleum
Reserves Corporation. They operated as divisions of RFC, the cor-
porate device being designed to protect RFC against losses from their
operations beyond its own capital contribution, etc. Some were even-
tually transferred from RFC to the jurisdiction of other agencies, as
indicated above. The size of their operations in the production, and
acquisition of strategic and critical materials, in plant building,
expansion and leasing, etc. raises questions as to budgetary and ac-
counting controls.

Prior to 1947, the RFC Act only required a quarterly report to
Congress of the operations of the Corporation "stating the aggregate
loans made to each of the classes of borrowers provided for and the
number of borrowers by states in each class." Assets and liabilities
of the Corporation were required to be shown, as were the names and
compensation of all persons employed by it at more than $400 per
month. (47 Stat. 11, repealed in effect by 61 Stat. 202.) Prior to
1945 government corporations generally (except those wherein the
proprietary interest of the U. S. was limited to preferred stock and
capital notes acquired through RFC operations) were subject to fi-
nancial reporting requirements prescribed by joint Treasury-Budget
Bureau regulations issued pursuant to Executive Order 8512 of August 13,
1940 (5 F.R. 2849).

The Government Corporation Control Act of 1945 (31 USC 841, 59
Stat. 597) now applies, providing in detail for the preparation of
budget estimates by government corporations, their submission to the
President through the Bureau of the Budget and by the President to
Congress, the audit of the financial transactions of the corpora-
tions by the General Accounting Office, a report by the Comptroller
General to Congress upon each such audit, including references to
illegal transactions, etc. The Act provides that no new government
corporations shall be created except by Act of Congress or under
specific statutory authorization. RFC's authority to create cor-
porations for mobilization purposes no longer exists. Such corpor-
ations as may be authorized in the future would not automatically fall
within the Corporation Control Act, but could, of course, be made to
do so by simple reference.

- 27 -

The Act of July 31, 1945 (59 Stat. 526), established the Export-Import Bank of Washington as an independent agency, with the Foreign Economic Administrator as Chairman of the Board of Directors.

Executive Order 9630 of September 27, 1945, terminated the Foreign Economic Administration and redistributed its functions. The Petroleum Reserves Corporation, the Rubber Development Corporation, and the U. S. Commercial Company were transferred to the Reconstruction Finance Corporation.

## Contract Renegotiation and Settlement

The War Contracts Price Adjustment Board was created by the Renegotiation Act of 1943 (title VII of the Revenue Act of 1943) (58 Stat. 85). The Board was to establish regulations for the conduct of renegotiation proceedings. The Board had discretionary review of any determination of excessive profits made by a department. It was composed of representatives designated by the Secretaries of War, the Navy, the Treasury, the Board of Directors of RFC, the Chairman of the War Production Board and a joint representative of the U. S. Maritime Commission and the Administrator of the War Shipping Administration. In determining excess profits, contractors and subcontractors were allowed, generally, all costs which they would be allowed in computing federal income and excess-profits taxes, including recomputed amortization deductions. The Board was to give consideration to efficiency, reasonable costs and profits with regard to volume of production, normal prewar earnings, comparison of war and peacetime products, amount of private and public capital investment, net worth, risk assumed, contribution to the war effort, etc. Power to inspect plants and audit books was, of course, given the Board. The Act reduced the area of renegotiation in war contracts originally provided in Section 403 of the Sixth Supplemental National Defense Appropriation Act of 1942 (56 Stat. 245), of which the Renegotiation Act was amendatory. The specific exemption was increased from $100,000 to $500,000. A time limit was provided, after which earnings could not be included as excess profits. Specified types of contracts and subcontracts were excluded altogether, regardless of size. Orders of the Board could be reviewed by the Tax Court in a trial de novo, upon application of aggrieved parties.

Title VIII of the Revenue Act of 1943 provided that the Secretary of a Department could require contractors to negotiate prices and could fix prices by order, in cases of failure of agreement, whenever he should consider the price of any required article or service unreasonable or unfair. Plant seizure and criminal provisions of the Selective Service Act (54 Stat. 892) could be invoked as sanctions.

The Office of Contract Settlement was established by the Contract Settlement Act of 1944 (58 Stat. 651) to provide for the settlement of claims arising from terminated war contracts. To advise the Director of Contract Settlement, the Contract Settlement Advisory Board was established by the act, with the Director designated as Chairman. Other members were the Secretaries of War, Navy, Treasury, the Chairman of

- 28 -

the U. S. Maritime Commission, Administrator of the Foreign Economic Administration, the Chairmen of the RFC Board, the War Production Board, the Smaller War Plants Corporation, and the Attorney General. The Act also provided for the creation of an Appeal Board, appointed by the Director, to hear appeals arising in connection with termination claims.

To assure uniform administration, the Act required the Director to prescribe policies and procedures to which the contracting agencies must conform in exercising their contract termination authority. Principles for determining fair compensation in terminated contracts, the prompt removal of property from the contractors' plants, and the financing of contractors in the period between termination and settlement, are dealt with in the Act.

The Act of October 3, 1944 (58 Stat. 785), placed the Office of Contract Settlement within the Office of War Mobilization and Reconversion, its functions to be subject to the supervision of the Director of War Mobilization and Reconversion.

## Food

Executive Order 9280 of December 5, 1942, consolidated several agencies to form the Food Distribution Administration and a Food Production Administration within the Department of Agriculture. The first included: (1) The Agricultural Marketing Administration, (2) Sugar Agency, (3) Distribution work of the Office for Agricultural War Relations, (4) Regulatory work of the Bureau of Animal Husbandry, and (5) Food units of the War Production Board. Under the second were: (1) Agricultural Adjustment Agency, (2) Farm Credit Administration, (3) Farm Security Administration, (4) Federal Crop Insurance Corporation, (5) Soil Conservation Service, (6) Food production work of the War Production Board, (7) Production work of the Office of Agricultural War Relations, and (8) Division of Farm Management and Costs of the Bureau of Agricultural Economics.

Executive Order 9322 of March 26, 1943, consolidated the Food Production Administration, Food Distribution Administration, Commodity Credit Corporation, and the Extension Service of the Department of Agriculture under an Administrator who was directly responsible to the President. Executive Order 9334 of April 19, 1943, changed the name to the War Food Administration. Functions of the Administration were to determine military and civilian food requirements, establish priorities, make food allocations for all purposes, and promote efficient distribution of the available food supply. The War Food Administration presents the only instance in World War II of an important special wartime function being administered by one of the permanent departments or agencies.

## Civilian Defense, Welfare, and Housing

This Division of the Advisory Commission was in effect embodied in the Office of Civilian Defense which was established by Executive Order 8757 of May 20, 1941. Under that order, the duties of OCD included:

(1) Coordination of Federal, State, and local civilian defense relationships.

- 30 -

(1) Maintain liaison between such agencies to provide housing facilities essential to national defense.

(2) Anticipate the need for additional housing in particular areas and facilitate the full use of existing facilities.

(3) Formulate programs to avoid shortages, delays and duplications in defense housing, recommend the same to the President, and advise the various agencies of their part in the programs.

(4) Facilitate the execution of such programs when approved.

(5) Advise with private and federal agencies as to plans and methods in the operation of approved defense housing projects.

(6) Keep continuously informed on progress of the defense housing program, report regularly to the President and make recommendations as needed for defense housing legislation.

Executive Order 9070 of February 24, 1942, transferred the functions of this agency to the Federal Public Housing Authority in the National Housing Agency, also created by the order. The latter agency took over and consolidated the functions and activities formerly carried on by some fourteen agencies. Its three constituent units under the order were the Federal Housing Authority, the Federal Home Loan Bank Administration, and the Federal Public Housing Authority. The last named was authorized to provide housing for persons engaged in war activities in localities in which the President should find that an acute shortage of housing existed or threatened to exist which would impede war activities, and that such housing would not be provided by private enterprise when needed. Appropriate accompanying land acquisition and construction powers were granted to the Authority. Also, under this order, the Federal Public Housing Authority took over the administration of Federal-local public housing contracts entered into under the Housing Act of 1937 (50 Stat. 891) (federal aid for low-rent housing and slum clearance) to divert such projects to war housing.

## Civilian "Relocation" and Censorship

Executive Order 9102 of March 18, 1942, created the War Relocation Authority to provide for the removal from designated areas of "persons whose removal is necessary in the interest of national defense," and for their relocation, maintenance and supervision. Executive Order 9066 provided that such areas were to be those designated from time to time by the Secretary of War or appropriate military commanders. The first order also provided for the War Relocation Work Corps within the War Relocation Authority. Persons removed from designated areas could enlist

["- 31 -", "in the Corps for the duration of the war on terms prescribed by the\nDirector of the Authority.", "Executive Order 9423 of February 16, 1944, transferred the Authority\nto the Department of the Interior to be administered under the super-\nvision of the Secretary.", "The Office of Censorship was established by Executive Order 8985 of December 19, 1941, under a Director of Censorship. It was provided that the Director", "\"shall cause to be censored in his absolute discretion, communi-\ncations by mail, cable, radio, or other means of transmission\npassing between the United States and any foreign country or which\nmay be carried by any vessel or other means of transportation\ntouching at any port, place, or Territory of the United States and\nbound to or from any foreign country, in accordance with such rules\nand regulations as the President shall from time to time prescribe.\"", "A Censorship Policy Board was created to advise the Director. The Di-\nrector had authority to establish an Operating Board consisting of rep-\nresentatives from any departments or agencies of the Government of his\nchoosing. The Policy Board consisted of the Postmaster General who was\nChairman, the Vice President, the Secretaries of the Treasury, War and\nNavy, the Attorney General, and the Director of the Office of War\nInformation.", "Executive Order 9631 of September 28, 1945, provided for the liq-\uidation of the Office of Censorship and for its termination, effective\nNovember 15, 1945. The Censorship Policy Board was also terminated by\nthe order.", "Alien Property", "The Office of Alien Property Custodian was established within OEM\nby Executive Order 9095 of March 11, 1942, under the authority of the\nTrading with the Enemy Act, as amended (50 U.S.C., App. 6). The functions\nof the office were further described in Executive Order 9193 of July 6,\n1942, and 9567 of June 8, 1945.", "The Alien Property Custodian was authorized to \"control or vest\"\nproperty owned by foreign governments, individuals and business enter-\nprises, to be held, used, administered, liquidated, sold, or otherwise\ndealt with in the interest of the United States, and to take such action\nas he deems necessary with respect to:", "(1) Any business enterprise within the U. S. \"which is an enemy\nnational.\""]

- 34 -

services or other war work, including all work directly affected by
the cessation of hostilities or the reduction of the war program.

The War Mobilization and Reconversion Act, October 3, 1944 (58 Stat. 788), established the Office of War Mobilization and Reconversion and an Advisory Board of twelve members, to be appointed by the President with the approval of the Senate, for the purpose of advising with the Director of War Mobilization and Reconversion and of making appropriate recommendations. The Act placed the following agencies within OWMR:

(1) The Office of Contract Settlement, created by the Contract Settlement Act of 1944 (58 Stat. 651).

(2) The Surplus War Property Administration and its successor, the Surplus Property Board, created by the Surplus Property Act of 1944 (58 Stat. 765).

(3) The Retraining and Reemployment Administration created by Executive Order 9427, *supra*, and the Retraining and Reemployment Administration created by title III of the War Mobilization and Reconversion Act, *supra*.

Executive Order 9488, October 3, 1944, transferred to the newly created OWMR all functions previously assigned to the OWM. Executive Order 9762 of July 25, 1946, transferred the functions of the Office of Economic Stabilization and of the Economic Stabilization Board to the OWMR. Executive Order 9809 of December 12, 1946, consolidated OWMR with other agencies to form the Office of Temporary Controls.²⁹

29/ OWMR thus served as the penultimate step in the winding up of the affairs of many wartime agencies. The Office of Temporary Controls was established within the Office for Emergency Management. By Executive Order 9809, *supra*, the other agencies consolidated with OWMR were the Office of Economic Stabilization, the OPA, and the Civilian Production Administration, immediate postwar successor of the War Production Board. During May 1947 a number of functions vested in the Office of Temporary Controls were distributed among various permanent departments and agencies by executive order, and the residue transferred to the Department of Commerce for liquidation. See Executive Order 9841 of April 23, 1947. From January 4 to June 27, 1946, there had also been a Director of Liquidation in OWM "to further proper preparations and methods for the orderly and timely winding up of the affairs of the temporary Federal agencies created for purposes of the war." See Executive Orders 9674 and 9744, of the dates mentioned.

- 35 -

### III. RECENT PROVISIONS

#### The National Security Act of 1947

In addition to reorganizing the military Departments, the National Security Act of 1947 (61 Stat. 499; 50 U.S.C. Supp., 404) established three important agencies to plan and operate in the field of industrial mobilization. Section 103 of the Act established in the Executive Office of the President the National Security Resources Board consisting of a Chairman, appointed from civilian life by the President with the approval of the Senate, and such heads or representatives of the various departments and independent agencies as the President should from time to time designate. It was provided that it shall be the function of the Board to advise the President concerning the coordination of military, industrial and civilian mobilization, including:

"(1) Policies concerning industrial and civilian mobilization in order to assure the most effective mobilization and maximum utilization of the Nation's manpower in the event of war.

(2) Programs for the effective use in time of war of the Nation's natural and industrial resources for military and civilian needs, for the maintenance and stabilization of the civilian economy in time of war, and for the adjustment of such economy to war needs and conditions.

(3) Policies for unifying, in time of war, the activities of Federal agencies and departments engaged in or concerned with production, procurement, distribution, or transportation of military or civilian supplies, materials, and products.

(4) The relationship between the potential supplies of, and potential requirements for, manpower, resources, and productive facilities in time of war.

(5) Policies for establishing adequate reserves of strategic and critical material, and for the conservation of these reserves.

(6) The strategic relocation of industries, services, government, and economic activities, the continuous operation of which is essential to the Nation's security."

The Act itself (Sec. 103d) and Executive Order 9905 of November 13, 1947, authorize the Board to utilize the facilities of the various departments and agencies. The Act also authorizes the Chairman to appoint advisory committees, which he has done and which have been used along with certain other organizations outside the government. The Board submits recommendations or reports to the President on the subjects outlined above.

- 36 -

One statutory function of the Board, not mentioned elsewhere, is to cooperate with the Secretary of Defense and the Commissioner of Public Roads in determining potential requirements for improved highways for the national defense. (Section 2 of the Federal-Aid Highway Act of 1948, 62 Stat. 1106.)

The Joint Army and Navy Munitions Board, originally organized in 1922 for the purpose of coordinating Army and Navy procurement plans, ceased to exist upon the creation of the Munitions Board within the National Military Establishment by section 213 of the National Security Act. The new Board was assigned all the records and personnel of the old. It consists of a civilian Chairman, appointed by the President with the approval of the Senate, and an Under Secretary or Assistant Secretary from each of the three military departments. It is the duty of the Board, under direction of the Secretary of Defense and in support of the strategic and logistic plans prepared by the Joint Chiefs of Staff:

"(1) to coordinate appropriate activities within the National Military Establishment with regard to industrial matters, including the procurement, production, and the distribution plans of the departments and agencies comprising the Establishment;

(2) to plan for the military aspects of industrial mobilization;

(3) to recommend assignment of procurement responsibilities among the several services and to plan for standardization of specifications and for the greatest practical allocation of purchase authority of technical equipment and common use items on the basis of single service procurement;

(4) to prepare estimates of potential production, procurement, and personnel for use in evaluation of the logistic feasibility of strategic operations;

(5) to determine the relative priorities of the various segments of the military procurement programs;

(6) to supervise such subordinate agencies as are or may be created to consider subjects falling within the general responsibilities of the Board;

(7) to make recommendations to regroup, combine, or dissolve existing interservice agencies operating in the fields of procurement, production, and distribution in such manner as to promote efficiency and economy;

(8) to maintain liaison with other departments and agencies for the proper correlation of military requirements with the civilian economy, particularly in regard to the procurement or disposition

- 37 -

of strategic or critical material and the maintenance of adequate
reserves of such material, and make recommendations in connection
therewith;

(9) to assemble and review material and personnel requirements presented by the Joint Chiefs of Staff and those presented by the production, procurement, and distribution agencies assigned to meet military needs, and to make recommendations to the Secretary of Defense.

(10) to perform such other duties as the Secretary of Defense
may direct."

The Secretary of Defense is directed by the Act to provide the
Board with such personnel and facilities as he may determine to be re-
quired for the performance of its functions.

Section 214 of the National Security Act established in the Na-
tional Military Establishment a Research and Development Board, con-
sisting of a civilian Chairman, appointed by the President with Senate
approval, and two representatives each from the Departments of the Army,
Navy, and Air Force, designated by their respective Secretaries.

It is the duty of the Board:

(1) to prepare an integrated program of research and development for military purposes;

(2) to advise on trends in scientific research relating to na-
tional security and measures necessary to assure continued and
increasing progress;

(3) to recommend measures for the coordination of research and
development among the military departments and the allocation
among them of responsibilities for specific programs of joint
interest;

(4) to formulate policy for the National Military Establishment
on research and development involving agencies outside the National
Military Establishment;

(5) to consider the interaction of research and development and
strategy and to advise the Joint Chiefs of Staff in connection
therewith. 30/

30/ A number of bills have been introduced in the 81st Congress to est-
tablish a National Science Foundation, and at this writing (April 1,
1950) one of them, S. 247, has reached the conference stage. Gen-
erally, it proposes the Foundation as an independent Federal agency
to initiate and encourage basic research in the various sciences by
making contracts, grants and loans of money, by establishing schol-
arships and fellowships, fostering international exchange of scien-
tific information, correlating its own programs with those of public
and private research groups, etc. By similar means the Foundation
would, after consultation with the Secretary of Defense, initiate and
support scientific research in matters relating to the national
defense.

- 38 -

## Export Control

The original export control act of World War II (54 Stat. 714; 56 Stat. 463) was extended several times. The Act of February 26, 1949 (Public Law No. 11), permits it to expire, but provides new authority for control of exports. It states that:

> "... the President may prohibit or curtail the exportation from the United States, its territories and possessions, of any articles, materials, or supplies, including technical data, except under such rules and regulations as he shall prescribe ... such rules and regulations may apply to the financing, transporting, and other servicing of exports and the participation therein by any person."

The President is authorized to delegate his authority under the Act to such departments, agencies, or officials of the Government as he may deem appropriate. But the authority conferred is not to be exercised with respect to any agricultural commodity, including fats and oils, when the Secretary of Agriculture determines that the supply of the commodity exceeds domestic requirements. Even in the latter field, however, one basic policy of the Act is to take precedence over the rule stated. That is "to further our foreign policy and fulfill our international responsibilities." Other stated policy is to "exercise the necessary vigilance over exports from the standpoint of their significance to the national security," as well as to protect the domestic economy from the excessive drain of scarce materials.

Violation of controls so established is punishable by imprisonment for one year and/or with the payment of a $10,000 fine.

The head of any department or agency exercising functions delegated under the Act may, in order to enforce it, make investigations, require reports, inspect records, books and property, or require the testimony of any person. He must make a quarterly report to the President and to Congress. Authority granted in the Act is to terminate on June 30, 1951, or on such prior date as Congress by concurrent resolution or the President may designate.

Finally, the Act provides that delegations, rules, regulations, etc. made under section 6 of the Act of July 2, 1940, shall, until amended or revoked, remain in full force and effect, the same as if promulgated under Public Law 11.

**The Economic Cooperation Act** contains provisions for coordinating ECA policies with the administration of the Export Control Act, and the Administrator is directed to refuse delivery to participating countries of commodities going into the production of commodities for delivery to nonparticipating countries, when we would refuse export licenses for commodities to those countries. (See 22 U.S.C. 1504[c], 1515[d].)

- 40 -

The First and Third Deficiency Appropriation Acts of 1949 (Public Laws 71 and 343) contain provisions requiring that stated amounts of the proceeds of the disposal of surplus property shall be available for renovation, restoration, improvement, etc. of industrial facilities. The First authorizes the use of $4,000,000 for such purposes during the fiscal year 1949, while the Third specifies that not to exceed $2,000,000 of the proceeds of the disposal of surplus property subject to a national security clause shall be available for such costs contracted for in fiscal 1950.

## Stock Piling

The Strategic and Critical Materials Stock Piling Act of July 23, 1946 (60 Stat. 596), rewrote the original Act of 1939 (53 Stat. 811). The Secretaries of War, Navy and Interior (and Air Force) continue to determine requirements through the Munitions Board and in cooperation with the Secretaries of State, Treasury and Commerce. As an added feature, the Act calls for appointment by the Secretaries of Treasury and the military departments of advisory committees from industries concerned with materials to be stock-piled. Purchases continue to be made by the Treasury Procurement Division³¹, according to Munitions Board specifications. They are to be made so far as practicable, from supplies in excess of current industrial demand. The Bureau of Federal Supply is to provide for the storage, security, maintenance, and necessary rotation of such materials. Final disposal is to be made by the Bureau of any materials removed from the Munitions Board list, but only after six months after the publication of a notice of such proposed disposition in the Federal Register and notification of the Military Affairs committees of Congress. No disposition is to be made without express congressional approval, except for reasons of obsolescence. The Secretaries of the military departments are to submit to Congress every six months a report of stock piling activities. All materials designated by the Munitions Board as strategic and critical, and owned by any federal agency and determined by it to be in excess of its needs, are to be transferred to the stock pile. Investigations of our mineral resources and development relating to defense needs are directed to be made by the Secretary of the Interior through the Directors of the Bureau of Mines and the Geological Survey. Appropriations amounting to $1,325,000,000 plus contract authorizations for large additional amounts have been made for stock piling purposes from 1946 through 1949 (60 Stat. 916, 61 Stat. 624, 62 Stat. 1047, and Public Laws 119 and 150, 81st Congress).

³¹ Now called the Bureau of Federal Supply, and forming part of the General Services Administration under the Federal Property and Administrative Services Act of 1949 (Public Law 152).

Section 115(i) of the *Economic Cooperation Act* (22 U.S.C. 1513[1], Public Law 47, 81st Congress) directs the Administrator, to the greatest extent practicable, to initiate projects for and assist other agencies in procuring and stimulating increased production in participating countries of materials which are required by the United States as a result of deficiencies or potential deficiencies in its own resources. The Administrator, with the approval of the Director of the Bureau of Federal Supply, shall enter into contracts for purchase of strategic and critical materials in any participating country, within the Bureau's appropriations and contract authorizations for procurement of such materials. Advance payments and delivery periods up to twenty years are authorized.

An additional section was inserted at the Appropriations Committee stage of the Bill which directs the use of not less than 5½ percent of the available counterpart funds to be applied to the purchase of strategic materials or other necessary interest of the United States, such as embassy buildings, etc. (Sec. 9(d) of Public Law 47).

## Rubber and Tin Facilities

Special provision was made for development of rubber and tin in the Acts of March 29, 1947, June 28, 1947, and March 31, 1948 (61 Stat. 24, 190; 62 Stat. 101). The two rubber acts declare the policy of maintaining, in addition to the stock pile and stock piling activities, a "technologically advanced and rapidly expandible domestic rubber-producing industry" capable of meeting emergency needs. It was declared necessary that, pending the enactment of permanent legislation, the U. S. continue allocation, specification and inventory controls of natural and synthetic rubber and rubber products and the authority of the U. S. to manufacture and sell synthetic rubber be continued. Such authority shall be exercised by RFC while that corporation has succession and thereafter by such officer or agency as the President shall designate. The expiration date of this Act is June 30, 1950.

The tin resolution provided that until June 30, 1951, or such earlier time as Congress should designate, RFC is to continue its function of (1) buying, selling, transporting tin and tin ore concentrates, (2) developing and operating by lease or otherwise the Government-owned tin smelter at Texas City, Texas, (3) financing research in tin smelting and processing. Reports to Congress every six months were required as to such operations.

- 42 -

Compulsory Orders and Plant Seizure

Section 18 of the Selective Service Act of 1948 (50 U.S.C. App., 468; 62 Stat. 625) authorizes the President, after consultation with the National Security Resources Board, to issue compulsory orders for articles and materials to meet the needs of the armed forces and the Atomic Energy Commission, and to seize plants which fail to comply with such orders, whenever he determines that it is in the interest of the national security to obtain prompt delivery. This authority expires on June 24, 1950.

Procurement by Negotiated Contract

Section 2 of the Armed Services Procurement Act of 1947 (41 U.S.C. 151, 62 Stat. 21) allows exception to the normal advertising-bid method of purchasing by the military departments and authorizes negotiation of contracts without advertising in sixteen specified cases. Among them are cases in which such method is determined to be necessary in an emergency, where delay or publicity must be avoided, where the contract is for research and development work, where this method is necessary to keep certain plants and mines in operation for availability in an emergency, and where it is necessary to avoid wasteful duplication in investments of money, time, and technical facilities.

Section 302(c) of the Federal Property and Administrative Services Act of 1949 (Public Law 152) authorizes procurement by negotiated contract by the General Services Administration and other nonmilitary executive agencies in the same types of special cases.

- 2 -

2. <u>Manpower emerges as an ultimate bottleneck in mobilization.</u>
It cannot be enlarged significantly; it can only be used more effec-
tively.

As we fought the last war we came to realize and adjust in vary-
ing degrees to the limits of all of these resources except manpower.
We never seemed to grasp fully its limitations. Luther Gulick has
expressed it thus:

"Manpower was our final inescapable limiting factor in fight-
ing this war. In spite of this we had no plans when we started
which indicated even roughly how many men we would put in the
armed forces, on land, sea or air; how many we would need in
what kinds of mines, or in what kinds of factories; we did not
know how many men we would require in agriculture; we never did
have a picture of what manpower was needed to keep power, trans-
portation, and the civilian economy going, or what kind of men
we must keep in technical training or in scientific research....

"The most important failure on the domestic front in the manage-
ment of the war was our inability to understand and to handle
the allocation of manpower."4/

At the end of 1943 "it was apparent that manpower was probably
the most critical factor in all phases of the war production program."5/
From then on emphasis changed from recruitment of additional people into
the labor force to switching workers from plant to plant in conformity
with program changes.6/ As a concurrent movement, munitions production
had risen rapidly to November 1943 and then abruptly leveled off.7/

Nevertheless, while the margins were close, on the balance-sheets
of war we had enough. Perhaps that was the basic reason we were not
forced into finding more effective answers to problems of manpower
allocation. We have no assurance of that margin again.

B. <u>Manpower Requirements</u>

1. General trends for general planning. For consideration of manpower requirements in any future emergency it is not necessary to obtain official estimates as to the probable size of the armed forces and the required supporting civilian labor force. Most of the essential factors stand out in a review of our past experience and an indication of general changes which might be anticipated under varying future conditions.

4/ Gulick, op. cit., pp. 49-50, 52.

5/ Civilian Production Administration, <u>Industrial Mobilization for War</u>
(Washington, 1947), p. 714.

6/ *Ibid.*, p. 853.

7/ See the unnumbered chart in <u>Problems of Mobilization and Reconversion</u>,
First report of the Director of War Mobilization and Reconversion,
January 1, 1945.

Table 1.

Growth and Distribution of the Labor Force During World War II.
Selected Months *

<table><thead><tr><th></th><th>April<br>1940</th><th>Sept.<br>1940</th><th>Sept.<br>1941</th><th>Sept.<br>1942</th><th>Sept.<br>1943</th><th>Sept.<br>1944</th><th>April<br>1945</th><th>July<br>1945</th></tr><tr><td></td><td colspan="8" style="text-align: center;">(in millions)</td></tr></thead><tbody><tr><td>Total labor force including<br>Armed Forces</td><td>55.1</td><td>56.8</td><td>58.8</td><td>61.1</td><td>65.7</td><td>66.8</td><td>66.3</td><td>67.5</td></tr><tr><td>Armed Forces</td><td>.3</td><td>.5</td><td>1.8</td><td>4.6</td><td>9.7</td><td>11.7</td><td>12.1</td><td>12.1</td></tr><tr><td>Civilian labor force</td><td>54.8</td><td>56.3</td><td>57.0</td><td>56.5</td><td>56.0</td><td>55.1</td><td>54.2</td><td>55.4</td></tr><tr><td>Unemployment</td><td>8.2</td><td>6.8</td><td>4.7</td><td>1.7</td><td>.9</td><td>.6</td><td>.5</td><td>1.0</td></tr><tr><td>Employment</td><td>46.6</td><td>49.5</td><td>52.3</td><td>54.8</td><td>55.1</td><td>54.5</td><td>53.7</td><td>54.4</td></tr><tr><td>Agricultural</td><td>9.4</td><td>10.8</td><td>9.9</td><td>9.5</td><td>10.0</td><td>9.7</td><td>8.7</td><td>9.9</td></tr><tr><td>Nonagricultural</td><td>37.2</td><td>38.7</td><td>42.4</td><td>45.3</td><td>45.1</td><td>44.8</td><td>45.0</td><td>44.5</td></tr><tr><td>Munitions industries<sup>1/</sup></td><td>4.2</td><td>4.7</td><td>6.5</td><td>8.8</td><td>10.9</td><td>10.2</td><td>10.1</td><td>9.2</td></tr><tr><td>Other manufacturing<sup>2/</sup></td><td>6.2</td><td>6.6</td><td>7.5</td><td>7.4</td><td>7.2</td><td>7.0</td><td>6.9</td><td>6.9</td></tr><tr><td>Federal war agencies<sup>3/</sup></td><td>.1</td><td>.1</td><td>.4</td><td>1.1</td><td>1.6</td><td>1.7</td><td>1.7</td><td>1.6</td></tr><tr><td>Other government</td><td>3.9</td><td>4.0</td><td>4.2</td><td>4.3</td><td>4.0</td><td>4.0</td><td>4.0</td><td>4.0</td></tr><tr><td>Transportation and<br>public utilities</td><td>2.9</td><td>3.1</td><td>3.4</td><td>3.5</td><td>3.7</td><td>3.8</td><td>3.8</td><td>3.9</td></tr><tr><td>Construction</td><td>1.1</td><td>1.5</td><td>2.0</td><td>2.5</td><td>1.5</td><td>1.1</td><td>1.1</td><td>1.2</td></tr><tr><td>Mining</td><td>.9</td><td>.9</td><td>1.0</td><td>1.0</td><td>.9</td><td>.9</td><td>.8</td><td>.8</td></tr><tr><td>Trade and service</td><td>11.6</td><td>12.0</td><td>12.9</td><td>12.6</td><td>12.5</td><td>12.6</td><td>12.6</td><td>12.8</td></tr><tr><td>Other<sup>4/</sup></td><td>6.2</td><td>5.7</td><td>4.5</td><td>4.1</td><td>2.8</td><td>3.4</td><td>4.1</td><td>4.1</td></tr></tbody></table>

1/ Includes all metal-using industries, rubber industries, selected chemical industries, and Federal manufacturing arsenals and navy yards. No allowance was made for civilian production by these industries.

2/ Includes all other manufacturing industries, regardless of their volume of war orders.

3/ All civilian employment in the National Military Establishment, Maritime Commission, and special agencies, except arsenals and navy yards.

4/ Differences between Census estimates of total nonagricultural employment and Bureau of Labor Statistics estimates of employees in nonagricultural establishments. Includes self-employed, proprietors, domestic servants, and unpaid family workers, plus differences due to incomparabilities between the two series.

*Sources: Data for labor force, unemployment, agricultural and nonagricultural employment from Census Bureau. Data for components of nonagricultural employment from Bureau of Labor Statistics.

Prepared by U. S. Department of Labor, Bureau of Labor Statistics, April 7, 1950.

- 4 -

defense would claim a substantial portion of manpower and only the
barest civilian essentials could be afforded. For survival, effort
would have to be concentrated sharply on beating off and defeating
the enemy. Or if we were called upon even more than last time to
supply allies in the field, additional sources of manpower would be
needed. Such a contingency might even affect the best balance be-
tween civilian and military manpower. Some of our men might more
effectively be kept in our high production factories and thus con-
tribute more to victory than were they to engage in combat with a
reduced stock of weapons. The most likely prospect is that more
manpower than last time will have to be used. New sources must be
tapped.

In any case, to achieve the best civilian-military balance it
must be recognized that both sectors are essential to winning a war.
If too much manpower is put in the field they will lack enough sup-
port from the civilian economy for maximum effectiveness. Moreover,
there is no point in a sadistic curtailment of civilian activity if
it is impractical to shift the released resources into direct mili-
tary effort. More effective is an expansion of total output.

3. Manpower requirements involve more than mere numbers. Total war and corresponding mobilization mean the utilization of a wide range of capabilities. It is true that some fields of effort expand more than others. In the last war construction manpower expanded early to build facilities; munitions employment followed and showed the highest percentage increase of the major industrial groups (see Table 1, above).

The increase in emphasis is in manufacturing, and there on hard
rather than soft goods. The wide range of necessary occupations re-
mains. Executives, professional persons, skilled and semi-skilled labor,
common labor, all are still essential.

Disruptions of war change the relative needs for the various skills
and necessitate extensive transfers. Meanwhile critical shortages may
occur. For special skills the disparity between requirements and avail-
able supply may be fantastic. In a War Manpower Commission release
July 6, 1942, listing 138 essential occupations in which there was a
shortage, the Chairman said that "for every available ship and boat-
building assembler, 94 are needed, and for every available tool maker,
31 are needed." Spot shortages plagued us throughout the war.¹²/ In a
prolonged war, general shortages in unskilled male labor develop.
Through accelerated promotion, training facilitated by job simplifica-
tion, and a shifting of workers to better paying or more pleasant jobs
a gap is created at the bottom. The influx to fill this gap is no longer
adequate. Therefore, identifying and preparing for specific potential
shortages of all types are essential phases of mobilization planning.

12/ See, for example, cases mentioned in Civilian Production Adminis-
tration, op. cit., pp. 416-417.

- 5 -

Besides problems of how many, when, and of what kinds, manpower requirements encompass geographic location--where. Insofar as manpower supply was concerned, this factor was not given much attention during the last war. As one result, large migrations of population took place. In general the movement was away from the South and Mid-West and to the Pacific States, the industrial East and North Central States, and other scattered localities. ¹³/ Workers had to be where the work was. This set off a new series of problems, particularly concerning housing and other community facilities to accommodate the influx of workers and their families. A large portion of these migrants have remained. Hence should we have a repetition in the mobilization pattern, workers apparently would be more nearly located where present factories are. But should the threat of attack from the sea or over the polar regions impel relocation of facilities in safer locations the whole process might have to be repeated in reverse. Dispersión of facilities as a protection against atomic annihilation would precipitate similarly severe readjustments.

Manpower requirements thus embody a number of factors, acting upon each other. The sheer magnitude of transactions necessary to see that qualified men are at the right places on time is extremely large. A general indication is given by the workload of the United States Employment Service during the war. That Service was by no means the exclusive channel of employment. Yet it made more than 10,000,000 placements in each of the years 1942 and 1945, and over 12,000,000 in each of the intervening years.¹⁴/ This was for what must now be considered a minimum war.

### C. Manpower Supply

1. The labor force. While total population may be a rough indication of potential manpower supply it greatly overstates available labor. Small children, for example, add nothing to immediately available labor. On the contrary, they subtract from it because their care commands the attention of a substantial portion of adult women. The core of manpower for industrial mobilization is rather the active labor force--people actually with jobs or seeking them, the employed and the involuntarily unemployed. The balance between these two groups is now substantially different from what it was prewar.

In the spring of 1940, of a total labor force of 55,100,000, some 300,000 men were in the armed forces and 8,200,000 were unemployed.¹⁵/

13/ U.S. Bureau of the Census, *Current Population Reports*, Series P-25, No. 12, August 9, 1948.

14/ U.S. Employment Service, *A Short History of the War Manpower Commission*, June 1948, p. 76 (mimeographed).

15/ Table 1, facing page 3.

- 6 -

In December 1949, the total labor force was 63,500,000, including 1,400,000 in the armed forces, 58,600,000 employed in civilian jobs and 3,500,000 unemployed. 16/ While we do not have full employment at present, we are much closer to it than prewar. Hence there is less slack in immediate labor supply. The beginnings of mobilization would soon wipe it out.

This does not mean we are less capable of effective mobilization now; rather the reverse. Millions of the prewar unemployed had been without real jobs for years and both their skills and spirit had deteriorated. This is not true of the present group. And those at work are employed at relatively more productive skills. They have the immediate background of experience and are using the fruits of wartime plant expansion plus an improvement and enlargement program amounting to $50 billion in the three years following the war. The American industrial economy and the workers who man it thus constitute a much more formidable force for mobilization than existed before the war. But the smaller amount of slack in employment indicates that, upon mobilization, controls would have to be instituted much earlier and efforts to expand the labor force would need to begin immediately. Since practically all employable men of working age are already in the labor force the major sources of additional workers are elsewhere. Chart 1 gives a summary view of the composition of the 1949 labor force and indicates the principal sources of potential additions.

2. **Woman power.** Women constitute the largest group of potential additions to the civilian labor force. During the war, women workers increased by some five million and their prewar proportion of the labor force of about 25 percent grew to over 36 percent, or to a total of about 20 million. Women have long constituted a large segment of the labor force in the manufacture of nondurable goods but they greatly expanded their role as well in the durable goods field during the war. 17/ In fact it was found that with proper consideration for her lesser physical strength a woman could do almost every war job a man could, and perform many of them better. Prejudice against women workers was weakened accordingly during the war when there were far from enough men for the jobs. Moreover, the use of women in positions for which they were fitted, both in civilian and military life, released men for armed service or for other jobs which were appropriate.

16/ *Monthly Labor Review*, February 1950, p. 204. According to Census Bureau estimates, May 1950 unemployment was 3,100,000.

17/ Mary Elizabeth Pidgeon, "Women Workers and Recent Economic Change," *Monthly Labor Review*, December 1947, pp. 666-67. The statistics given include all female workers 14 years of age and over. Hence this group overlaps the teen-age group discussed below.

- 8 -

school, and only one million were neither working at paid jobs nor getting an education. This represented an increase over the expected trend normal of about 2.8 million, distributed as follows:

<table><thead><tr><th></th><th colspan="3" style="text-align: center;">Number (in millions)</th></tr><tr><th></th><th style="text-align: center;">Total</th><th style="text-align: center;">Boys</th><th style="text-align: center;">Girls</th></tr></thead><tbody><tr><td>Total................................</td><td style="text-align: center;">2.8</td><td style="text-align: center;">1.7</td><td style="text-align: center;">1.1</td></tr><tr><td>Those who remained in school but also took a job, typically part-time................</td><td style="text-align: center;">1.1</td><td style="text-align: center;">.7</td><td style="text-align: center;">.4</td></tr><tr><td>Those who left school early to take a job.</td><td style="text-align: center;">.5</td><td style="text-align: center;">.3</td><td style="text-align: center;">.2</td></tr><tr><td>Those who left school early to enter the armed forces........................</td><td style="text-align: center;">.5</td><td style="text-align: center;">.5</td><td style="text-align: center;">--</td></tr><tr><td>Those who took a job, but would normally be out-of-school nonworkers or homemakers..</td><td style="text-align: center;">.7</td><td style="text-align: center;">.2</td><td style="text-align: center;">.5</td></tr></tbody></table>

The occupational pattern of youth changed considerably from 1940 in the process. Manufacturing replaced agriculture as the largest employer, retail trade gained in importance and domestic service declined sharply. The trade and service industries met much of their manpower requirements through part-time workers; manufacturing was the chief claimant of the full-time teen-age worker.22/

The enlarged employment of youth brought with it some questionable social results. Public school enrollments dropped,23/ child labor laws were relaxed in a number of States,24/ working hours and conditions were not always appropriate to youth, and migration to war-industry centers abruptly separated immature teen-agers from parental supervision.25/ To help combat these effects there was organized a National Go-To-School26/ Drive and the War Manpower Commission issued a statement of national policy on youth employment27/ which stressed the patriotic need for continuing education, the possibilities of part-time employment and the importance of maintaining applicable laws and standards of employment.

22/ "Teen-Age Youth in the Wartime Labor Force," Monthly Labor Review, January 1945, pp. 6-7, 10-12, 15.

23/ "Sources of Wartime Labor Supply in the United States," Monthly Labor Review, August 1944, p. 272.

24/ "The Effect of the War on Child-Labor Legislation During 1943," The Child, November 1943, pp. 69-73.

25/ Beatrice McConnell, "Child Labor and Youth Employment in This Nation's Third Year of War," Social Service Review, December 1944, pp. 445-460.

26/ See community handbook of this title issued by the Children's Bureau and the U. S. Office of Education, 1944.

27/ "Policy on Employment of Youth Under 18 Years of Age," issued January 30, 1943.

This was endorsed by the other government agencies most directly concerned with war production. Extensive community action to protect standards and prevent exploitation were also organized.²⁸ The effective tapping of the pool of teen-agers thus calls for as much restraint as promotion.

4. Over-age workers. Wartime employment opportunities brought back from retirement a substantial number of old persons and held many more from retiring. By April 1945 some 70,000 old-age beneficiaries had dropped their benefits and returned to work. Over ten times that many who could have retired and obtained such benefits continued on the job instead. The number of men 65 years of age and over then in the labor force were 25 percent above normal.²⁹

5. The physically handicapped. The physically handicapped constitute another marginal group which employers found could perform many regular jobs. The prewar approach among many companies was to take care of their own not too seriously handicapped employees by reserving sedentary jobs for them. Some companies had strict rules on hiring men with certain handicaps even though the deficiencies bore no relation to the job for which an applicant was being considered. This was changed under the pressures of war shortages.

The modern approach is to examine the individual, determine his assets, and then, adding on his particular handicap, to find a position he can fill.³⁰ Extensive surveys show that, when properly placed, workers with serious handicaps are just as productive and reliable as are unimpaired men.³¹

It is estimated that there are five or six million persons in the labor force who have handicaps serious enough to create difficulty in finding employment. Another million could be employed if appropriate rehabilitation or training facilities were available to them.³² Governmental groups at all levels and private organizations, working with the President's Committee on Employment of the Physically Handicapped or

28/ McConnell, op. cit.

29/ Ewan Clague, "Employment Problems of the Older Worker," Monthly Labor Review, January 1947, p. 661.

30/ United States Employment Service, Selective Placement for the Handicapped (Washington, 1945).

31/ See reports of a joint survey conducted by the Chamber of Commerce of the United States and the National Association of Manufacturers on Employment of Physically Handicapped and Older Workers, 1949; also U.S. Bureau of Labor Statistics, The Performance of Physically Impaired Workers in Manufacturing Industries, Bulletin No. 923, 1948.

32/ William P. McCahill, "Rehabilitation and Placement of Handicapped Workers," Monthly Labor Review, September 1948, pp. 282-285; see also Office of Vocational Rehabilitation, Annual Report, 1949, and Brass Tacks, 1949.

- 10 -

operating locally, are continuing the campaign for better utilization
of this labor source. Since a rehabilitated worker returns in self
support and income taxes many times the cost of his rehabilitation<sup>33/</sup>
this is good peacetime business. It also helps add to critical man-
power resources for an emergency.

6. The Negro minority. The Negro minority constitutes another identifiable group in the labor force.<sup>34/</sup> Here the problem is more one of utilization than of addition to the numerical supply. Significant wartime shifts in Negro employment took place away from agriculture and into higher paying positions in manufacturing and (to a lesser extent) white collar occupations. Many Negro women also left domestic service and moved into trade and manufacturing. In general these gains were kept during the postwar transition.<sup>35/</sup> To that extent Negroes now constitute currently a strengthened resource for industrial mobilization. Presumably further improvement in skills could follow enlarged job opportunities.

7. Immigrants. The importation of workers from other countries is still another source of addition to the American labor force. For example, under special programs, common labor from Jamaica and Mexico were brought into the United States during the war. These groups made significant contributions, especially in agriculture. In utilizing them in industrial production experience varied. Many manufacturers considered their productivity comparable to that of domestic labor; others did not agree. In any case special accommodations were indicated and necessary training appeared to be absorbed with somewhat more difficulty.<sup>36/</sup>

8. Prisoners. Groups under various degrees of restraint may also be used to a limited degree--domestic prisoners and other institutional inmates, interned enemy aliens, military prisoners of war, and similar categories. To a large extent, their numbers and usefulness are unknown factors in advance of war.

9. Resources of allies. Viewed more broadly, the mobilization planner must consider the manpower resources of potential allies as well. A world war is not fought by individual nations but by associations of nations. To the extent that they can bring their resources, including manpower, to bear in a coordinated fashion they are that much closer to victory.

33/ Ibid.

34/ Of all the nonwhites in the U.S. enumerated in the 1940 Census, 96 percent were Negroes.

35/ Seymour L. Wolfbein, "Postwar Trends in Negro Employment," Monthly Labor Review, December 1947, pp. 663-665.

36/ "Wartime Utilization of Jamaicans in United States Industrial Establishments," Monthly Labor Review, November 1945, pp. 848-857.

- 11 -

10. **Utilization of all resources.** There are thus a number of sources from which additions to the labor force may come--women, youth, overage, handicapped, minority, alien and miscellaneous groups. In any mobilization all need to be utilized to a considerable extent. The degree to which successive marginal layers of each group need to be brought into active productive effort depends to a substantial degree upon the urgency of the war and the extent to which direct attack occurs upon the United States. In a great disaster, where naked survival is at stake, the long-range benefits of education and affectionate home care go by the board. Every able-bodied adult and child who could add anything to the net effort would need to be pressed into service. Under such circumstances the labor force comes to approach in size the population. But since the marginal additions to the total effort at those levels of participation are so small, that sort of mobilization is only a last resort.

11. **Labor productivity.** It is not in numbers that American manpower excels, even at rather high levels of mobilization. Where the American worker stands out is in productivity. No nation has the capital equipment for its workers to use that the United States has. And none has men with comparable facility to make use of it. American industry stresses building and operating high speed precision machines for heavy work, plus standardization, interchangeability, and assembly line techniques to achieve mass production.

As tools, procedures, and skills are developed and meshed, productivity reaches astounding levels. An illustration of this is the wartime record of the munitions industries. Production and employment are compared in Chart 2. The progressive increase in production of finished munitions per worker employed is apparent. At the time of Pearl Harbor when the program was still getting under way, still in large part in the make-ready stage, the average output of finished munitions was only $150 worth per worker per month. A year later as the program approached full development average output was some $400 worth. By the end of 1943 this had been raised to approximately $500, a level which continued until VE-Day. As a more specific example from shipbuilding, Kaiser's Oregon Shipbuilding Corporation used an average of 1,064,000 man-hours of direct and indirect labor on the first round of the ways in building Liberty ships. By the 24th round this had been reduced more than two-thirds to 313,000 man-hours, an outstanding but not untypical experience among the better run yards.

American defense strength thus lies in productivity as well as in the size of its actual and potential labor force. In war we may well be outnumbered but the margin of victory could still be ours.

37/ U.S. Maritime Commission, *Statistical Summary of Shipbuilding* (Washington, 1949), p. 156. The average for all yards on the first round was 1,257,000 man-hours per Liberty ship.

- 12 -

D. <u>Methods for Assuring Manpower Effectiveness</u>

Apparent or real agreement can usually be reached on the general
goals of mobilization, and, in relation to manpower, on the general
proposition that each person should make his appropriate contribution
to winning a war or in assuring the fulfillment of democratic ideals
in the peace following victory. The real problem often becomes one
of developing and using the methods which can effect the goals.
David Novick has said:

"It is precisely here that our wartime experience has the most to teach us. During the war years almost every possible variation of industrial control technique was given an extended or limited trial. As a result there is a basis in experience for answering most of the significant questions about operating procedures."38/

Certainly in the field of manpower a wide variety of methods were
tried and more were considered. True they sufficed for victory, but
they also showed significant limitations and probably would have proved
inadequate had the pressures of production been much greater.39 Any
fully effective program of manpower mobilization will have to use a
large variety of methods. Seldom is the choice one of "either-or."
Rather it is a matter of determining how far it is necessary to go
through an extensive progression of methods, and how intensively each
one used should be exploited, in order to achieve the desired results.
In a democracy there is a natural and justifiable reluctance to exer-
cise controls beyond the degree necessary. At the same time, when war
is one of survival, it becomes easier to realize that controls exer-
cised at the wish of the people are not necessarily undemocratic.

1. Development of essential information. For both planning and operating a manpower program the basis of action must be facts. This goes much beyond mere totals and includes manpower needs by specific industries, skills, geographic areas, as well as detailed information to match these in terms of available and potential supply. Lack of such information was a handicap at the beginning of the last war and it never did achieve a full degree of reliability and usability. The Bureau of the Budget has said: "WMC cried 'wolf' so often that other agencies were skeptical even when shortages actually appeared."40 But crude as they were, WMC estimates were invaluable in conducting the manpower program.41 For effective mobilization planning we probably need better information than we had or have.

38/ David Novick, Melvin Anshen, and W. C. Truppner, *Wartime Production Controls* (New York, 1949), p. 4.

39/ It has been estimated that a really tough manpower program could bring 20 million more workers into the labor force. *Economics of National Security*, edited by G. A. Lincoln and T. H. Harvey (West Point, 1949), p. 45.

40/ U.S. at War, p. 432.

41/ *Short History of WMC*, pp. 17-18, 139.

- 14 -

Among the large variety of reasons why workers do not wish to
move, either geographically or from a company producing low priority
goods, are transportation and "settling-in" costs, inadequate housing
and community facilities at the new location, and fear of loss of
seniority, reemployment and other rights. It might be useful in
another emergency for the manpower agency to have funds available to
meet needed transportation and "settling-in" costs. Certainly, ap-
propriate housing and other community facilities must be included in
any relocation plans.

The necessity for protecting job rights in transfers was recog-
nized early in the defense period and before our entry into the war. 44/
But the voluntary methods suggested did not prove to be completely ade-
quate to the task. With the current growth in company pension plans,
job rights may have even greater significance in a future emergency.

Veterans were given protection on reemployment and seniority rights. Perhaps less well-known was the extension by separate law<sup>45</sup> of similar reemployment benefits to merchant mariners, employed in a civilian industry closely related to the armed forces in war theatres. Merchant mariners leaving other than temporary shoreside civilian jobs were simply considered as being on furlough. Later this right was extended to cover combinations of service with the merchant marine and the armed forces.<sup>46</sup> It may well be entirely feasible to expand this approach to cover workers who shift from low to high urgency war employment, provided there were proper certification by, say, the United States Employment Service that such a shift was desired and that the worker stayed continuously employed in high priority work.

4. Increasing productivity

a. High morale is an essential ingredient of a productive
worker, especially in a free democratic economy. The levels of produc-
tion achieved during the war constitute evidence of a generally high
level of morale among American workers. But there were weak spots and
the strengths did not come without effort. The rise in labor turn-
over<sup>47</sup> during the war indicated that job satisfaction among old and
new workers was far from complete. There were many reasons for this,
but certainly among them was shopping for jobs paying higher wages or
having other attractions.

In an attempt to foster amity and increased production many labor-
management committees were established during the war, spontaneously or
under government sponsorship.<sup>48</sup>

44/ Civilian Production Administration, *op. cit.*, pp. 168-169.

45/ Public Law 87, 78th Congress.

46/ Public Law 669, 79th Congress.

47/ See chart in U. S. at War, p. 438.

48/ Civilian Production Board, *op. cit.*, pp. 423-424.

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Disputes concerning wages and the union shop become the province of the National War Labor Board. "Maintenance of membership" was the compromise developed on the union shop issue. Wage matters were in something of a state of flux throughout the war. Unions were strong, and although they had concurred in a "no strike" agreement, the rising cost of living gave them a case for higher wages. The Little Steel formula allowed a 15 percent wage rise to match the rise in the cost of living to May 1, 1942. From then on the Board conducted an elastic defense of that formula. Hence wages were not frozen. By resort to "correcting inequities" and allowing various "fringe" increases theoretical base wages were kept fairly level. The total effect, however, was for adjusted straight-time hourly earnings to continue to rise, roughly paralleling the rise in the cost of living. 49/

In general the "no strike--no lockout" pledge by unions and management was kept during the war. Such strikes as did occur were usually brief, local, wild-cat ones not authorized by national unions. The principal exceptions were a series of authorized actions taken by the United Mine Workers in 1943 to break the Little Steel formula. These were ended by Presidential intervention either by ordering the workers back to work or by seizure of the mines. The miners accounted for almost two-thirds of the man-days lost by strikes in that year. 50/ All strikes combined from Pearl Harbor until the conquest of Japan involved the loss of less time than was saved by the workers voluntarily in giving up their traditional Labor Day and Fourth of July holidays. Despite some glaring examples to the contrary, the area available for improvement is accordingly small. The most powerful restraining force in labor disputes seemed to be public opinion. Whether this would be adequate in a third world war is an open question.

In any future conflict it would seem to be easier to stabilize wages if the cost of living were likewise more effectively stabilized. However, enough flexibility would have to be kept in wage policy to correct inequities in a frozen structure and thus make possible a more effective distribution of manpower.

Probably more than was done last time could be achieved in the way of forced savings to keep down inflationary pressures or disruption of wage scales without injuring initiative. Then in postwar reconversion we might again avert a recession through the use of stored mass purchasing power. But any such program would seem to require, in good faith, a strict price stabilization policy which would prevent the wiping out of a large portion of such savings through inflation.

49/ U. S. at War, pp. 194-201, 236.

50/ Department of Labor, *Strikes in 1943*, Bulletin No. 782, and *Work Stoppage Caused by Labor-Management Disputes in 1945*, Bulletin No. 878.

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Adequate community facilities, including such things as housing, schools, shopping facilities, transportation, and the like are essential to the morale of employed workers and also have a decided effect on recruitment. Assurance of adequate provision of community services is thus an important element in manpower mobilization. This received very inadequate attention in the last war. In a future emergency more weight needs to be given to this factor in locating centers of industrial production and in making adjustments to the requirements of centers that are picked. This is particularly important in tapping successfully the great potential reservoir of women workers. In helping provide these facilities women themselves can be utilized extensively in part-time jobs.

Fortunately for present preparation for mobilization, strengthening community facilities may be of great benefit in peace as well as war--worth the effort even though World War III never occurs.

b. **Training.** The War Manpower Commission considered the training program one of the outstanding manpower achievements of the war:

> "The Apprenticeship Training Service, Training-Within-Industry and earlier the NYA and the pre-employment and supplementary training courses developed under the auspices of the Office of Education trained several million workers drawn from the unemployed, youth entrants, women and others of the unutilized labor reserve. Particularly effective when the emergency programs were completed were the in-plant developments stimulated by the Training-Within-Industry services. These training techniques were carried down through the shops so that the foremen, supervisors, and leadmen literally in thousands of establishments were able to furnish better leadership and supervision. This on-the-job training was particularly valuable in breaking in new workers with a minimum of effort and with maximum returns to the war program."51

Training was not only an answer to making productive workers of green recruits. In conjunction with simplification of jobs and the accelerated promotion of partly trained workers, it also enabled employers to meet the shortage of skilled labor.52

51/ *Short History of the WMC*, p. 139. See also WMC's *Training Within Industry Report* (Washington, 1945), especially pages 91-92, which give tabulations of company reports showing great increases in productivity and reductions of grievances resulting from TWI programs.

52/ *U.S. at War*, p. 174.

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With the great decrease in new workers and an easing of the manpower shortage, employer interest in training has dropped. It might be to the advantage of the nation if the benefits of training at all levels were more universally appreciated. Continuing public training programs may aid in this.

In terms of mobilization planning, a first requirement is the detailed determination of manpower needs by skills and locations and the establishment of a matching inventory of supply. Then specific training needs will become more apparent and the comprehensive program envisaged by the NSRB can be tailored to fit. Some types of training, such as an apprenticeship training which may in addition be unduly extended by unions as a method of limiting supply and entry into the union, take a substantial period of time--time which can better be afforded in peace than in war. The TWI type of training requires first a training of trainers, which requires time. It would also be of help to employers to know what was going to be done with specific men in the armed forces reserves so training of replacements could be conducted as appropriate. Hence the time for mobilization training is now as well as later when an emergency immediately threatens.

c. Increasing hours of work is a direct way of increasing production within limits. Average weekly hours in manufacturing increased from 37.5 in the first half of 1940 to about 45.3 in mid-1943, at which level it stabilized until VE-Day. This represents a change from a scheduled work week of 40 hours in 1940 to one of 48 hours for 1943-45, a gain of more than 20 percent. In shipbuilding and some other industries a scheduled work week of 60 hours or more was not uncommon.53/

Just what level is the optimum for maximum production is difficult to determine because many factors are involved. However, in general, efficiency apparently does not decline significantly when a 5-day, 40-hour week is increased to a 5-day, 50-hour or a 6-day, 48-hour week.

Beyond that, efficiency drops sharply. Instituting a 7-day week appears to be futile, because of increased absenteeism and decreased efficiency.54/

Great Britain averaged a 50-hour work week during the war.55/ A return at least to the 48-hour week in another emergency may be expected as a quick method of increasing total productivity. It is assumed that the principle of the 40-hour week would be retained through use of overtime pay, with appropriate price or other adjustments if necessary.

53/ *Ibid.*, pp. 431-32; War Manpower Commission, *Manpower Statistics*, September 1943, p. 47, and October 1945, p. 29.

54/ U.S. Bureau of Labor Statistics, *Hours of Work and Output*, Bulletin No. 917 (1947), pp. 3-5.

55/ Lincoln and Harvey, *Economics of National Security*, p. 49.

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d. Preventing sabotage. While this is not a means of increasing productivity, it at least prevents its decrease. The danger is probably more acute than in the last war. For one thing the racism of Nazism was less persuasive and more easily identified in labor circles than is the appeal of communism. Moreover, in conformity with Communist strategy, emphasis is placed on the penetration of labor unions and the obtaining of organizational positions of influence.

It is, of course, impossible to assess the degree of danger which we might face in a war through sabotage by Communist agents of the USSR. Perhaps fully as significant would be attempts to hamstring a preparedness program which had been launched because creeping aggression had increased the danger to the United States. The efforts to impede aid to England prior to the German invasion of Russia, and the sudden cessation of those efforts upon the invasion, are historical cases in point.

Current efforts by union leaders to remove labor's Communists from positions of influence are encouraging.⁵⁶ The most effective means of purging their ranks of Communists is probably by the unions themselves.

5. Job control. Regardless of the answer to the question as to whether it is easier to move facilities and materials than it is people it is generally easier to focus control in industrial mobilization on material things than to try to regulate intimately human behavior. Hence job control is particularly attractive as a tool in effective utilization of manpower resources. There are several approaches to this.

a. Allocation of contracts. In a related context, it has been said that "The power to contract is the power to control."²⁷ The manpower implications of this power were inadequately exploited in the last war. In part, the reason goes back to the beginning of defense expansion. We were just coming out of a depression and the millions of unemployed were still a severe problem. The possibility that manpower would prove to be the overall limiting factor on our war effort was inconceivable to most officials. Accordingly the facilities expansion program was undertaken without particular reference to long-range labor force limitations. Once facilities were in place, production contracts followed as a matter of course.

By the end of 1942 artificial shortages of labor were appearing "due largely to concentration of contracts in congested areas already suffering from labor and community facilities shortages, to a hoarding and under-utilization of labor, and to discrimination against various minority groups."⁵⁸ And of early 1945 it could still be said, "a

56/ See for example, *Time*, February 27, 1950, p. 25; and *Washington Post*, March 30, 1950, p. 1, for a European parallel in guarding against sabotage.

57/ Novick, et al., *op. cit.*, p. 382.

58/ Civilian Production Administration, *op. cit.*, p. 419.

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better coordination among WPB, the War Manpower Commission, and the
Armed Services in redistributing war contracts would have contributed
greatly to the alleviation of labor shortages."59/

WPB's Directive No. 2, in October 1942, instructed the procure-
ment services to consider labor supply as a factor in placing con-
tracts. The War Manpower Commission sought to facilitate this by
issuing periodically listings of labor areas grouped according to the
degree of supply of labor. The directive was strengthened in 1943
but its effect was never very substantial.60/ Some consideration was
given to shifting lines of civilian production from tight to ample
labor areas through the use of materials control:

"Both WMC officials and the Planning Division of WPB urged that WPB adopt a program of 'concentrating' specific civilian industries in areas of adequate labor supply, on the lines of the concentration program already adopted in Great Britain. Great opposition was encountered, however, not only from industrialists and Congressmen in the areas when curtailment was proposed, but also from WPB industry divisions. After two or three relatively minor concentration orders had been issued, the program was abandoned and was never revived."61/

An attempt toward local control of contract allocation was made through committees. They provided some review over prime contracts; the vast number of subcontracts were outside their jurisdiction. The best known comprehensive approach was the so-called "West Coast Program." But again cooperation was reported to be lacking and effectiveness remained small. Even when near the end of the war Mobilization Director Byrnes issued instructions to require clearance with area committees on increases in output requiring employment expansion, practically no subcontractors did so.62/ Whatever merits review had in other respects its influence on contract allocation in accordance with manpower seemed to be chiefly informational. There is a lack of evidence to show that manpower factors were considered by the contracting authorities to have great relevance in the placing of contracts. Rather there seemed to be an expectation that other government agencies, or the individual workers concerned, would meet the manpower needs.63/

We did learn that the location of production had much to do with
meeting manpower requirements, that the contracting procedure is a key
step in determining where goods will be made, that control to be effec-
tive must extend to the subcontracting level, and that manpower agencies

59/ *Ibid.*, p. 891.

60/ U.S. at War, p. 433; *Short History of WMC*, pp. 114-119.

61/ U.S. at War, pp. 433-434.

62/ *Short History of WMC*, pp. 119-127; also *Civilian Production Administration*, *op. cit.*, pp. 840-845.

63/ *Short History of WMC*, pp. 127-131.

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must be in a position to influence contract allocation. For maximum
utilization of manpower, production (and hence contract allocations)
has to be spread in some conformity with the distribution of the labor
force.⁶⁴

b. **Control of employment opportunities.** In attempting to meet manpower pressures of the last war and at the same time keep a thoroughly voluntary system of civilian manpower controls, extensive experimentation was conducted. Within the limits of such a system almost everything was tried.

As in World War I, companies enticed workers away from other companies--"pirating" it was called--rather early in the war. The first approach to control this was through gentlemen's agreements not to pirate from each other. Such agreements applied only among the signatories; it was always open season on employers outside the group.⁶⁵ The system was of benefit for a time, but, as with other "controls," its effectiveness progressively deteriorated.⁶⁶

The official government control program centered on the proposition that if all new hiring could be regulated, so could the movement of men from job to job, to the benefit of the war effort. By closing new job opportunities it was expected to be able to hold a man in his current employment, and by limiting his job opportunities he could be channeled into those jobs where he could make the maximum contribution. Three general methods were used: so-called stabilization controls, priority referral, and employment ceilings.⁶⁷

Under stabilization controls a worker currently engaged in war production was not supposed to be hired unless he had a written release from his employer; or unless the United States Employment Service found that he was not being used (1) full time, or (2) at his highest skill, or (3) that his present employment entailed excessive travel time, or (4) that there were compelling personal reasons for wishing to change jobs. Moreover, there were extensive groups left outside the controls--e.g., agricultural workers, short-term hirings, domestic servants, school teachers. And after a 60-day lapse of work a man was a "new employee."⁶⁸ Little ingenuity was therefore required to escape the restrictions. A worker could quit for a relatively short period, go into excepted employment, get himself fired or convince a release officer that some personal reason impelled a job change. Overt pirating was controlled somewhat but releases were very easy to get. The net effect was that, in general,

64/ The role which small business should play relative to large business is considered elsewhere in this study.

65/ *Short History of WMC*, p. 100.

66/ Civilian Production Administration, *op. cit.*, p. 703.

67/ *Short History of WMC*, pp. 38, 113.

68/ *Ibid.*, pp. 101-103.

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c. **Utilization review and control.** Related to job control, and especially to the imposition of employment ceilings, is the assurance of effective utilization of available manpower. Systematic comprehensive evidence of the degree of under-utilization in the last war seems to be lacking but informed belief persists that it was very extensive. Persons dealing with manpower ran into numberless cases of hoarding, "soldiering," and other types of under-utilization. This was at least as true of the armed forces as the civilian economy. Excessive idleness due to widely fluctuating increases in the armed forces and to defective replacement systems are obvious examples from the military field. At one time the Army was actually over its authorized strength, did not know it, and was pressuring the Selective Service System for more men.⁷⁸ Illustrations from civilian employment include not only periods of idleness due to lack of work and hoarding against possible expansion but even examples such as sleeping on night shifts after checking in.

There was probably more talk about effective utilization than there was action. Very strong resistance to utilization programs was encountered in both the military and civilian fields.

Business management and the procurement agencies were opposed to WMC intruding as an "outside" agency into what was considered management's prerogative. Labor representatives went along with the part of this view that held that utilization was not government's affair. WMC could conduct utilization surveys if it was invited to do so--but it was practically never invited.⁷⁹

A major reason was doubtless that individual managements did not relish the prospect of being shown up as wasters of manpower. It was more convenient to look on the WMC as solely a supplying agency without power to see what use was made of workers supplied. Hence, opportunities to improve utilization were very poorly exploited.

In some cases where a thorough survey was allowed, results were impressive. For example, in one plant employing 27,000 workers in certain divisions under-utilization ran as high as 60 percent. As a result of adopting the WMC survey recommendations a request for several thousand additional workers was dropped, the existing work force was cut 10 percent, and still the production schedule was exceeded.⁸⁰ Better utilization of manpower was one of the significant means whereby general shortages of industrial manpower were averted.⁸¹ The War Department Manpower Board also helped substantially in fitting manpower allocation to personnel needs within the Department and Army. Even work measurement techniques were utilized to help uncover situations of over- or under-staffing.⁸²

78/ Selective Service System, *Selective Service and Victory*, pp. 155 ff.

79/ U.S. at War, pp. 441-442; *Short History of WMC*, pp. 57-58.

80/ *Short History of WMC*, p. 58.

81/ U.S. at War, p. 432 (note).

82/ *Army Service Forces, Manpower Utilization; Report on Work Measurement*, June 1, 1946.

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of positions which could be filled by men of less than general service qualifications. Moreover by, in effect, telling a large number of IV-F's that the armed forces were not interested in them a degree of control was lost in the last war, control which might have contributed substantially to moving or keeping these men in essential occupations.

Age and occupation can be interrelated readily. Young men are less likely to have achieved positions of irreplaceability; older men are less likely to meet the physical standards for combat life. There is no sharp cut-off between the two, but a gradual shift. This is recognized by Selective Service in presenting its recommended pattern:

"As any future conflict will probably result in total war the legislation and regulations of a future Selective Service System should be prepared on that basis. Men ages 18 through 64 and perhaps women aged 18 through 50 should be registered. The following proposals are made concerning males:

<table><tr><td>Under age 18:</td><td>No control, except prohibition from voluntary enlistment.</td></tr><tr><td>Ages 18 to 25:</td><td>No deferment.</td></tr><tr><td>Ages 26 to 29:</td><td>Must be indispensable and irreplaceable, necessary to and regularly engaged in war production, agriculture, or an activity in support of the national health, safety, or interest to qualify for occupational deferment.</td></tr><tr><td>Ages 30 to 33:</td><td>'necessary to and regularly engaged in' the above for deferment.</td></tr><tr><td>Ages 34 to 37:</td><td>'regularly engaged in' the above for deferment.</td></tr><tr><td>Ages 38 to 44:</td><td>'regularly engaged in activity in support of the national health, safety, or interest' to be liberally construed.</td></tr><tr><td>Ages 45 to 64:</td><td>Under jurisdiction of the Labor Department, or the agency coordinating civilian activities.</td></tr><tr><td>Ages 65 and over:</td><td>No control."<sup>87</sup></td></tr></table>

This is practically the pattern which existed at the end of the last war. The lottery basis of order numbers would not be used; age would substitute for it. The plan also does not contemplate blanket deferments such as were given, in effect, to farmers under the Tydings Amendment.<sup>88</sup> The requirements of support or care of dependents could be handled in ways other than through deferment on the basis of dependency alone.

87/ Selective Service System, Age in the Selective Service Process, Special Monograph No. 9 (Washington, 1946), p. 129.

88/ On September 1, 1943, "agricultural deferments amounted to 47 percent of the number of men aged 18 to 44 who were in the agricultural labor force in 1940. Occupational deferments of other workers at this time amounted to only 7 percent of the 1940 male labor force aged 18 to 44." U.S. at War, p. 445.

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(2) Proposals looking toward national service were advanced at several stages during the last war. None of them was adopted. As early as 1940 national service was considered by some as a logical supplement to Selective Service. During 1942 concrete, comprehensive proposals were developed, in a favorable Administrative atmosphere. However, opposition developed in the Management-Labor Policy Committee of the WMC and among other leaders of organized labor and management. Accordingly the President decided that he was not prepared to go forward with such legislation at that time.

During 1943 Congress considered in committee the Austin-Wadsworth Bill (S. 666 and H.R. 1742), which followed closely previous proposals. Effective opposition by labor, management and agriculture developed and the bill was not reported out of committee.

In his January 1944 "State of the Union" message the President said that while he believed we could win the war without a national service law, such legislation would shorten the war and reduce its toll. Accordingly a revised S. 666 was introduced.

This 1944 bill affirmed the obligation of individuals to support the war effort and provided for the registration and classification of all men aged 18 to 65 and all women between 18 and 50. If a call for volunteers for necessary jobs was not practical or failed, workers were to be assigned or frozen to essential occupations or where shortages existed or threatened. Union and seniority rights were given some protection. Violations were punishable by not more than $1,000 fine or not more than six months imprisonment or both. Again opposition kept the bill in committee.

When the revived Austin-Wadsworth bill bogged down attention was turned to a more limited approach. Principally this involved requiring IV-F's to serve in war work as, when and where most needed. Such a bill passed the House a few weeks after the President unqualifiedly appealed for national service legislation in his January 6, 1945, annual message. The Senate passed a substitute bill of somewhat different scope but without imposing on individuals any legal duty for war work. With the rapidly approaching end of the war, the bills died in conference committee.

(3) *Arguments for national service*, while numerous, fall into a few broad categories. In general, the proponents of national service legislation claim that -

(a) National service makes possible the more effective utilization of workers in a number of ways. They would be directed to where they were most needed. Excessive turnover, absenteeism, and hoarding could be controlled. Discrimination against employment of minority

91/ Grenville Clark and Arthur L. Williston, *The Effort for a National Service Law in World War II* (Washington, 1947), pp. 2-9; U.S. at War, pp. 450-455.

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(c) It would perpetuate inequities in wages and working conditions. In a free economy inequities tend to be corrected because otherwise workers will transfer or unions will force corrective action. Freezing workers in jobs would remove these pressures and therefore retain discriminatory practices.

(d) It diverts attention from the real inefficiencies of a labor program, such as lack of coordination between government policies and agencies influencing labor use and the placing of contracts without regard to labor supply. It would not add significantly to the labor force, and it would not prevent employers from hoarding or otherwise under-utilizing available manpower.

(e) National service would be administratively unworkable. The detailed and effective individual allocation of men in the armed forces in the last war was too great a task for the available specialists to perform it. An attempt to assume detailed direction of the whole labor force would unavoidably bog down, especially since the government would have to match each assignment with assurance that the job was not sub-standard in any respect. Moreover, wholesale refusals to abide by assignment action would make enforcement impossible. No substantial portion of the population could be put in prison.

(f) Foreign experience with national service is not completely analogous. In Great Britain, labor is directly represented in Parliament and the Cabinet and can thus safeguard its rights. Moreover, Britain is small and the movement of labor is correspondingly simplified.

(g) National service is a last resort and its need in the United States has not been proved. Britain adopted national service only under the threat of imminent invasion. Free labor in the United States turned in an unparalled record of war production. Since the great bulk of workers did the jobs that would be wanted anyway it would be uneconomic to impose a system on all to face a comparatively small number of persons into specific jobs. Moreover, other available methods, such as job control, are adequate to the need without resort to national service.⁹²/

92/ For arguments pro and con on national service see, among others, U.S. Congress, Senate, Committee on Military Affairs, *Manpower (National War Service Bill)*, Hearings on S. 666, March 2-June 9, 1943, 78th Cong., 1st Sess., and *National War Service Bill*, Hearings on S.666, January 12-March 2, 1944, 78th Cong., 2nd Sess.; Grenville Clark and Arthur L. Williston, *Report to the National Council of the Citizens' Committee for a National War Service Act* (Dedham, Mass., 1947); Chamber of Commerce of the United States, *Should Labor be Drafted?* (Washington, 1944); John J. Corson, *Manpower for Victory* (New York, 1943); Department of Social Sciences, U.S. Military Academy, *Economics of National Security*, edited by G.A. Lincoln and T.H. Harvey (West Point, 1949). (Continued on following page)

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(5) Evaluation of support. Early in the war it might have been possible to adopt national service, but it was not necessary. Later when manpower supply was tighter and the end of the war was imminent, national service was something to be avoided if possible. Accordingly adequate support was lacking. With labor, management and agriculture against it for a variety of reasons it is not surprising that there was no general enthusiasm for national service. Presumably there would be a repetition of this situation in another emergency unless invasion threatened, actual attack occurred, or manpower supply became very tight. Under those circumstances national service might be supported, especially on a decentralized basis. Planners need to be prepared for all likely eventualities.

c. Control of individuals short of National Service. It is readily apparent that both basic approaches to employment control--job control and detailed assignment under national service--have serious shortcomings and administrative difficulties. There has naturally been some exploration of the area between them to see if there is a common meeting ground which might include most of the advantages and few of the disadvantages of each.

Some WMC officials felt that even if they had overcome their organization's weaknesses in administration and had made full utilization of available powers they would still have needed specific authority to direct the movement and allocation of individuals. They felt that this was indicated particularly to overcome shortcomings in such matters as allocation, turnover, efficient recruiting of women, and transfer of non-essential workers.²³ Nevertheless the difficulties of detailed assignment under full national service and the formidable opposition which it engenders indicates little likelihood of the adoption of complete control over workers in any but the most extreme future emergency.

**Historical precedents.** American war experience has included several attempts toward controlling the job behavior of individuals. The alternatives presented in the World War I program of "Work or Fight" is an illustration. An extension of this idea was being developed at the time

92/ Cont.

For accounts of British experience see Sir Godfrey H. Ince, *Mobilization of Man-Power in Great Britain for the Second Great War* (Manchester: Manchester Statistical Society, 1945); International Labour Office, *Wartime Transference of Labour in Great Britain* (Montreal, 1942); *Statistics Relating to the War Effort of the United Kingdom* (London: H.M. Stationery Office, 1944) Cmd. 6564; Ministry of Labour and National Service, *Manpower* (London: H.M. Stationery Office, 1944); and *The British Commonwealth at War*, by W. Y. Elliott, H. Duncan Hall and others (New York, 1943).

The comparative merits of national service and job control are also considered in Section IV c (2) of the text of this report.

93/ *Short History of WMC*, pp. 99-100.

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of the Armistice.²⁴/ Another approach in World War II was the fur-loughing of certain Army men with essential civilian skills into the enlisted reserve on the condition that they go into specified needed employment. While the contribution of these men to production was undeniably substantial, changes in induction rules and attrition for other reasons sharply reduced the number who remained in their originally assigned employment.²⁵/ To some extent the pattern of occupational deferment for men of inductable age was a work or fight approach. If such a man left deferable employment he immediately became subject to induction. "Work or fight" is thus not foreign to American practice although it was given only limited application in two world wars.

While the possible variations in a work or fight program are numerous there are a few basic elements which seem to recur.

Indicated elements of an intermediate program include the following:

(1) The requirement that each individual has an obligation to serve either in the armed forces or in essential civilian activity. Since all gain from victory, all should contribute to victory in accordance with his or her capabilities. To some extent this idea is also implicit in the position of the supporters of job control since they would deny employment in a wide range of nonessential jobs. However, the work or fight approach seems to involve a positive obligation to serve if eligible.

(2) Registration to establish identity, possible availability, qualifications, and limitations. Women as well as men might be included.

(3) Classification of jobs in terms of urgency and other characteristics.

(4) Classification of individuals in terms of availability and obligation to serve. Insofar as civilian employment is concerned this would mean for many registrants simply staying in their present jobs or household occupations. For others it would involve a requirement to work at a job of a specified or greater urgency. There may also be occupational limitations. For example a plumber might be allowed to take a job as a pipefitter in a shipyard but not as a farmer even though both occupations might have similar urgency. Of course, classifications would be subject to appeal.

24/ War Industries Board, Report, p. 90.

25/ Short History of WMC, pp. 86-88.

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(5) Referral to available jobs. While classification of
individuals might be performed by Selective Service boards utilizing
the advice of the employment agency, the latter would handle job
referrals.

(6) Opportunity to choose jobs within specified limits.
In this way forced assignment to particular jobs would be avoided and
room allowed for individual preferences and the development of volun-
tary and spontaneous labor-management cooperation.

(7) Coercion could be through civil penalties. However, a violator might be allowed to enlist in the armed forces if he were otherwise acceptable. In any case the coercive elements of such a program would have to be applied with sufficient flexibility so that large numbers of persons would not be in violation of the law. As with any law, successful enforcement is contingent upon keeping quite close to popular acceptance of the law's provisions.

A graphic presentation of one of the proposals which incorporates some of the above elements is presented in Chart 4. This is one of various alternative plans developed by the Selective Service System and termed by them "Supported Selective Service." It would require that all deferments for other than men wholly incapacitated would be contingent upon satisfactory civilian employment. Correspondingly, the armed forces would have to utilize in some capacity all men denied continued deferment.

Pros and cons of a middle way. The proponents of the work or
fight approach claim that it avoids such shortcomings of detailed na-
tional service as "slavery," administrative infeasibility and inflexi-
bility. It overcomes such gaps in job control as the sloughing off of
only the least qualified workers under lowered ceilings, evasion, and
inability to expand the labor force. It allows the individual worker
many of the freedoms he has under job control, including the freedom to
develop comprehensively labor-management cooperation. At the same time
it retains many of the advantages of detailed national service. Direc-
tion is supplied to the labor force but not at the sacrifice of individ-
ual initiative. Individual responsibility for aiding the war effort is
affirmed and means supplied for achieving fuller participation of quali-
fied persons in essential activity. It can assure better utilization
of workers through channeling them into the most important work which
they can perform. Even if only the most available or qualified people
are subject to control they can be utilized where they are needed most;
marginal workers can take care of marginal needs.

However, such a plan still requires positive compliance on the part
of individuals. Although this does not extend as far as the requirement
for performing armed service if called, it nevertheless disturbs some
persons as being undemocratic. Certainly it does entail direct coercion

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of some sort. If measures short of this prove to be adequate, direct control over individuals may be unnecessary. In such a case, concentration on impersonal control of jobs may make possible the avoidance of what would be at best an extensive and difficult program.

Despite these doubts, the approach of requiring service but allowing substantial choice in jobs may be an acceptable meeting ground of the proponents of job control and of national service.²⁶

## E. General Conclusions on Manpower Control

1. Manpower control in the last war was characterized by experimentation, confusion, and half-way measures. In terms of numbers, recruitment and placement functions were performed reasonably well. For the type of war which was fought, victory proved that the manpower program was adequate though wasteful.

2. Under almost any likely assumptions, a larger labor force would be needed in a future war for maximum effectiveness.

3. Fewer unemployed at present, in comparison with 1939, means that we have a stronger defense potential but also that the need for controls probably would be manifest at an earlier stage of a war.

4. There are several major sources of additional manpower. These are chiefly women, youth, average persons, the handicapped, possibly aliens, and the better use of minority groups. As a source of additions to the labor force, women constitute the largest group.

5. Information on manpower requirements and resources, of a rather specific nature, is necessary for effective mobilization planning. A start on this has been made and further development is indicated.

6. Job protection, particularly on seniority and reemployment rights apparently needs to be assured workers going into defense employment.

7. Efficiency and total output of the labor force can be increased by raising morale (important to this are such items as the settlement of disputes, stabilization of prices as well as of wages, and provision of adequate community services), by training and job simplification, by lengthening the work week, and, negatively, by preventing sabotage.

8. Better job control might be achieved by:

²⁶/ Several interviews with manpower specialists lends credence to this observation.

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a. Giving great consideration to manpower factors in allocat-
ing contracts and in promoting subcontracting. In the last war manpower
factors did not greatly influence contract allocations and significant
local and area shortages resulted.

b. Employment ceilings and hiring control, backed by authority. The possibilities of purely voluntary methods were pretty well exhausted in the last war. In general, purely voluntary methods did not control. Rather they simply exposed more people to employment opportunities through the USES.

c. Utilization studies, made or at least controlled by a central manpower agency, covering the use made of manpower in both civilian and military fields. This area was barely scratched in the last war.

9. Control over individuals might be extended by:

a. Selective Service deferment geared principally to age and occupation. The Selective Service System might also be prepared to register women if needed.

b. National Service, defined as assigning individual people to individual jobs, under compulsion if necessary. However, when conducted in this detailed fashion it may threaten democratic institutions, may bog down administratively, and may be unnecessary.

c. A middle ground between job control plus Selective Service and complete national service. Under such a plan individuals (possibly women as well as men) could be registered and required to engage in jobs of a specified or greater urgency rating. They could choose the particular job. Historical parallels are the work or fight idea of World War I, and the use of the enlisted reserve and occupational deferments in World War II.

10. The greater the degree to which controls become detailed the more administrative decentralization is indicated. However, since manpower is a single large pool, top level administrative coordination or integration for all its allocated uses may be advisable.

11. The planning and training stages of labor mobilization can be
well developed in peacetime and thus save valuable time in the event of
another emergency.

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The accompanying reorganization plan is designed to make the National Security Resources Board a more effective instrument. Successful performance of the Board's mission requires a wide range of detailed study and analysis to cover all the major aspects of national mobilization. A committee of department heads or departmental representatives encounters some natural difficulties in providing supervision and leadership in such an extensive and detailed activity. The Chairman has the difficult task of exercising discretion as to which matters shall be submitted for Board approval. The departmental members of the Board cannot possibly supervise or approve the Board's extensive and detailed activities and yet, as Board members, must accept ultimate responsibility for all such activities. Likewise, the departmental members are encumbered by the difficulty of having to reach collective and speedy decisions on a great many matters for which they, as Board members, are responsible.

By vesting the functions of the Board in the Chairman, the difficulties of Board operation will be overcome. At the same time, the reorganization plan provides for the continued participation of the several departments and agencies in the task of mobilization planning. This is not only a matter of established policy but also a requirement of the National Security Act. The departments will continue to have representation on the Board. The Board, in an advisory relationship to the Chairman, will be a useful arrangement for obtaining the necessary participation of departments in mobilization planning and for coordination of their activity. It will enable the departments to keep abreast of the total range of security resources planning. Without reliance on the departments for the execution of much of the actual job of mobilization planning, coordination with the total range of governmental policies and objectives would be lost.

The Congress in passing the National Security Act Amendments of 1949 recognized the difficulty which exists when functions of staff advice and assistance are placed in a board-type agency. The National Security Act Amendments of 1949, in clarifying the role of the Chairman of the Munitions Board and the Research and Development Board, strengthened and increased the effectiveness of these staff agencies of the Secretary of Defense by providing for the exclusive exercise of responsibilities by the Chairman. This plan achieves the same objective for the National Security Resources Board.

The accompanying reorganization plan provides for a Vice Chairman appointed by the President and confirmed by the Senate. The tremendous responsibilities of the National Security Resources Board and the heavy workload on the Chairman fully warrant this. Providing the Chairman with a principal associate for the exercise of his responsibilities is consistent with the usual practice in other agencies of the executive branch.

After investigation I have found and hereby declare that each reorganization included in Reorganization Plan No. 25 of 1950 is necessary to accomplish one or more of the purposes set forth in section 2 (a) of the Reorganization Act of 1949.

I have found and hereby declare that it is necessary to include in the accompanying reorganization plan, by reason of reorganizations made thereby, provisions for the appointment and compensation of a Vice Chairman of the National Security Resources Board. The rate of compensation fixed for this officer is that which I have found to prevail in respect of comparable officers in the executive branch of the Government.

The taking effect of the reorganizations included in Reorganization Plan No. 25 may not in itself result in substantial immediate savings. However, the important objective is maximum effectiveness in security resources planning.

The security of this Nation requires that these steps be taken to enable security resources planning to move forward more effectively. It is for that reason that Reorganization Plan No. 25 is today submitted to the Congress. It is for that reason, and that reason alone, that I strongly urge congressional acceptance of Reorganization Plan No. 25.

Harry S. Truman

The White House, May 9, 1950.

Prepared by the President and transmitted to the Senate and the House of Representatives in Congress assembled, May 9, 1950 pursuant to the provisions of the Reorganization Act of 1949, approved June 20, 1949

**Section 1.** Functions of Chairman and of Board--The functions of the National Security Resources Board are hereby transferred to the Chairman of the National Security Resources Board, and the Board shall hereafter advise and consult with the Chairman with respect to such matters within his jurisdiction as he may request.

**Section 2.** Vice Chairman.--There is hereby established the office of Vice Chairman of the National Security Resources Board. Such Vice Chairman shall (1) be an additional member of the National Security Resources Board, (2) be appointed from civilian life by the President, by and with the advice and consent of the Senate, (3) receive compensation at the rate of $16,000 per annum, and (4) perform such of the duties of the Chairman as the Chairman shall designate.

**Section 3.** Performance of functions of Chairman.--The Chairman may from time to time make such provisions as he shall deem appropriate authorizing the performance by any other officer, or by any agency or employee, of the National Security Resources Board of any function of the Chairman.

Appendix V to
Public Affairs Bulletin No. 81
Mobilization Planning and the National Security
(1950 - 1960)

by
William Y. Elliott

APPENDIX V

EXCERPTS FROM A SPEECH OF HON. CARL VINSON (GEORGIA)
ON NATIONAL DEFENSE (HOUSE OF REPRESENTATIVES, APRIL 4, 1950)

Washington, D. C.

July 1950

***

I want to state emphatically that, in my judgment, Mr. Johnson's
[Secretary of Defense] economy scalpel has not only carved away some serv-
ice fat but has cut--deeply in some areas--into sinew and muscle of the
armed services.

The Secretary is to be commended in glowing terms for cutting off
the fat. But his economy program has also impaired the fighting effective-
ness of the armed forces, and for this the Secretary is not, in my opinion,
to be commended.

I regret deeply that in his zeal for economy, Secretary Johnson has
weakened the national security in very important respects. And what has
been his answer to that charge?

He answered only a few weeks ago in a speech delivered in the city
of Washington that the Joint Chiefs of Staff have approved the existing
budget--and, therefore, the inference was drawn that the Nation's military
leaders are content with the funds requested of the Congress.

But, members of the Committee, in that very address the Secretary con-
tradicted himself. He went on to say that the Joint Chiefs of Staff had
requested $20,000,000,000 for national defense. This, in itself, answers
the assertion that the Joint Chiefs of Staff are content with the existing
national defense budget.

And let me say one thing more about this.

It is an open secret in Washington that the Secretary actually re-
quested a considerably smaller budget for 1951 than was decided upon by
the President. It follows, then, that the Secretary, if he had his way,
would provide many billions less than the Joint Chiefs of Staff deem to
be the minimum required for national security, and considerably less than
the President himself considers necessary.

There are issues in this matter of reductions in the armed forces
that go to the core of our system of government. They touch the very
heart of our representative processes.

I say that until and unless the Constitution of the United States
is amended to relieve the Congress of the United States of its responsi-
bilities to provide for the common defense, to raise and support a navy,
to provide and maintain an army, the Congress cannot--and, so far as I am
concerned, must not--sit idly by and leave to administrative whimsy how
small a national defense this Nation will have.

There are some who conceive that the role of the Congress is limited
to imposing monetary ceilings on the armed forces--that the Congress has
no control, and should have none, over how small the armed forces become.

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I deny that categorically.

I say that to the extent that the Congress accedes to that concept, to that extent the Congress unconstitutionally delegates its responsibilities to the executive branch of the Government.

I say that when the armed forces are reduced by others than the Congress, and without prior consultation with the appropriate agencies of the Congress, the American people are thereby deprived of the Constitution-derived control, through their Congress, over the size and type of national defense they want their Government to maintain.

In our scheme of government the Commander in Chief commands the forces placed at his disposal by the Congress; it is not his prerogative under the Constitution to determine the size of those forces. It is the duty of the Department of Defense--which is a creature of the Congress--to request the Congress to provide the armed might that it believes the security of the Nation requires. It is the responsibility of the Congress to decide whether the forces shall be larger or smaller than requested.

Let us get this clear.

The President does not provide the armed forces. That is the function of the Congress. The Congress provides the forces; the President commands them, as Commander in Chief. If we ever get this principle of our Government distorted, our whole fabric of government will be in jeopardy.

But here we have a new concept. It holds that the executive department shall decide how small the armed forces shall be--not the Congress.

It concedes that the Congress can impose ceilings on military strength. But, the idea goes, the Congress cannot establish a floor.

The Appropriations Committee is to be complimented for its searching inquiries of the Secretary of Defense on this point in the hearings of last January.

However, it is not enough merely to point to the problem, important as the problem is a principle of government.

The more important thing is to prevent such unilateral action in the future. For this purpose I introduced a bill on March 6 which would limit the authority of the Secretary of Defense to withhold funds appropriated by the Congress to 5 percent of any particular item. If it is desirable or necessary to withhold more than that, the bill would require consultation with the Committees on Appropriations of the Senate and House of Representatives prior to the taking of such action.

There can be no doubt that these reductions have scaled down the
fighting potential of the armed services.

It is absurd to contend that the more you reduce the stronger you
get.

I will have to leave it to others to sell this idea that we can rise
by falling, that we can advance by retreating, that we can achieve strength
through weakness.

Of course we must have economy in national defense.

But let us keep our eyes on our main goal--national security.

The purpose of unification is a sound national defense. Economy is
a by-product.

***