1 The Shift to Wartime Production Angela Brown Chapter 15 Section 1

Learning Targets 1. Explain how American businesses mobilized for war. 2. Summarize how World War II affected the American work force. 3. List the methods the government used to finance the war. 2

3 Mobilizing the Economy for War Supplying goods to Allied forces boosted American economy from Depression. Soon had to convert full-time to making war equipment. Outcome of war depended on American ability to produce enough bombers, tanks, uniforms, and other war materials. (war had destroyed factories in Europe)

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6 The Government Steps In Office of Price Administration (OPA) – established in 1941, to keep shortages from causing inflation – later rationing of scarce resources War Products on Board (NPB) – Jan 1942, to direct the conversion of peacetime industries to those that made war goods – armed forces gave out contracts and scheduled production, the WPB set priorities and allocated raw materials

7 Office of War Mobilization – set up in May 1943 to centralize the many agencies set up to deal with war production. Headed by James Byrnes called Assistant President. Byrnes ran country while FDR ran the war.

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9 Industries Convert Shirt factories made netting. Typewriter plants made machine guns. Last cars off assembly lines rationed to people who really needed them. Automobile factories made bombers.

10 Willow Run Plant Willow Run Plant – largest factory space in world by 1943 building 340 planes a months Mass Production techniques applied to ship building instead of keel up - built sections Cranes brought sections together, welders put them together – crews specialized in making certain sections (Entrepreneurs revolutionized – Henry Kaiser)

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12 Henry Kaiser Liberty ships made Kaiser famous – large sturdy merchant ships that carried supplies or troops, sometimes converted to hospital ships 1941 took 150 days to build one liberty ship – 46 days – 4 days

13 New Business Approaches Government established “cost-plus” system for military contracts – military paid development and production costs, plus a percentage of costs as profits. Pride and patriotism provided industry leaders with motivation. Business executives went to work in new government agencies in Washington – received a “dollar-a-year” salary – remained on own companies payroll

14 Coca Cola Some entrepreneurs found profitable new markets – Coca Cola; Every man in uniform will get a bottle of Coca-Cola for five cents wherever he is and whatever it costs the company. Troops drank 5 billion bottles. Established a future “army” of consumers

16 The “Great Arsenal of Democracy” Each year U.S. raised production goals for military materials and met them. By middle of 1945 U.S. had produced: 300,000 airplanes; 80,000 landing craft; 100,000 tanks and armored cars; 5600 merchant ships (2600 liberty ships); 6 million rifles, carbines, and machine guns; and 41 billion rounds of ammunition.

17 The Wartime Work Force Unemployment almost zero in U.S. Average weekly wages rose 50% from Union membership rose 10.5 million to 14.8 million. Representatives agreed to refrain from strikes and “lockouts”. The cost of living rose making the no-strike argument hard to honor.

18 Wildcats Strikes – organized by workers and not endorsed by unions Number of strikes rose between 1942 and Congress passed the Smith-Connally Act in June 1943 – limiting future strike activity leading-wildcat-strikes-met-Italian-firm-centre-row.html

19 Financing the War War production so vital government was willing to spend whatever necessary. Federal spending increased from $8.9 billion in 1939 to $95.2 billion in (GNP) more than doubled. Overall cost $321 billion – 10 times WWI

20 Higher taxes paid for 41% of cost. Revenue Act of 1942 increased number of tax payers from 13 million to 50 million. Introduced “pay-as-you-go” – withholding income taxes from people’s paychecks. Income tax rates increased gradually – reached a high of 94% for the richest taxpayers – extra taxes levied on corporate profits.

21 Government borrowed rest from banks, private investors and the public – Treasury Department launched band drives to encourage purchase of War Bonds – government savings bonds brought in about $186 billion visitdc.html

22 John Maynard Keynes had argued for deficit spending – government spending of borrowed money – to get economy moving Deficit spending skyrocketed during WWII – the economy turned around overnight – created a huge national debt that caused economic problems later.

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Exit Slip: 1. What was the purpose of the Office of War Mobilization? 2. The United States began to emerge from the depression as a result of… 3. Henry Kaiser contributed to wartime production by… 4. To meet the demand for war material, the American government… 24