Chapter 3: Finances and the Effects of Lend-Lease
Upon the outbreak of war in Europe the problems of the War Department became more acute. General apprehension solidified into clear realization that American rearmament was not merely desirable but was now necessary. A summary of the developments of the twenty-seven months when America was not wholly at peace but was not acknowledgedly at war should serve to illuminate the over-all problems that later chapters will explore in some detail. The financial story and the beginnings of the foreign aid program can hereafter be dismissed, since the Ordnance Department’s work under the Lend-Lease Act became part and parcel of its activities in behalf of the United States Army, and since after Pearl Harbor money ceased to be a controlling factor.
The Period of Limited Emergency
On 8 September 1939, a week after the German armies swept across the border into Poland and five days after Great Britain and France declared war, President Roosevelt proclaimed a state of limited national emergency and authorized the Army to take steps to bring itself up to full statutory strength. The greatly enlarged War Department appropriations voted earlier in the year had already set machinery in motion to hasten American rearmament. In August, at the President’s request, the Assistant Secretaries of War and Navy had appointed the members to the War Resources Board to assist in planning industrial mobilization. Early in September the Ordnance Department had ready a $6,300,000,000 over-all plan for carrying out its responsibilities under the Protective Mobilization Plan augmented for two years. The Ordnance Department completed an annex to PMP in November, showing schedules for increased production and tentative plans for additional storage space; district officers with constantly augmented staffs were expanding their procurement activities, contracting for production studies and new educational orders, while the government arsenals hurried through detailed blueprints of essential matériel and trained the inspectors for work in private manufacturing plants that were to undertake orders.
Time for industrial mobilization was of particular importance to the Ordnance Department because of the peculiar nature of ordnance matériel. Much of it was heavy, complex, and hard to manufacture. Since American industry produced no commercial counterparts of the big guns, the tanks, the high-explosive shells, and the bombs, special tooling up was
necessary. The six government arsenals, Ordnance officers estimated, could turn out about 5 percent of what the Army would need; hence, private industrial plants must be converted to munitions manufacture, and new facilities built. Under the most favorable circumstances that would take time.
The initial expansion of munitions production had come from orders placed with American industrial firms not by the United States Government but by France and Great Britain. Beginning in 1938, and increasing sharply after the outbreak of war in Europe, foreign orders had been placed with American companies for guns, rifles, ammunition, airplanes, and other military equipment, with the result that during 1939 and 1940 more munitions were produced in this country for the British and French Armies than for the United States Army.1 In December 1939 the President appointed an interdepartmental committee to coordinate foreign and domestic military purchases, and soon afterward the Anglo-French Purchasing Board was formed. Multiplying foreign orders by no means committed American industry as a whole to “all-out” war production. On the contrary, for many months after fighting began in Europe, the belief was widely held in America that the United States could and should avoid entanglement in the European war. In November 1939 the Congress amended the neutrality legislation to permit the sale of munitions to warring nations, but only on a cash-and-carry basis designed to keep America free from financial involvement in the conflict. During the winter of 1939–40, inaction on the Western Front was interpreted as a stalemate, and the conviction took hold in the minds of many Americans that this was a “phony war.” Many businessmen were reluctant to enter into agreements with the United States Government for the manufacture of military equipment because of the uncertainty of the outlook and because of the vigorous criticism the public had leveled at munitions makers during the 1930s. These and other factors deterred rapid mobilization of American industry for war production and directly affected Ordnance Department operations.
While, difficulties notwithstanding, the tempo of preparation had quickened during 1939 and the early months of 1940, it was laggardly in the light of the events of late spring 1940. In February General Marshall had presented to the Congress the War Department’s budgetary requests in figures that the House subcommittee promptly cut by about 10 percent. Early in April the House passed a bill for the reduced amount. Before the Senate could act came the German conquest of Denmark and Norway. During May, while discussion of large increases in War Department appropriations proceeded feverishly on Capitol Hill, the Nazi armies moved into the Low Countries and then into France. The changes in War Department concepts of need and in Congressional sentiment between September 1939 and mid-May 1940 plainly show in the tabulation of requests and sums voted. (See Table 5.) After February 1940 these figures include money authorized for contract obligations, the payment of which would not fall within the fiscal year. Sen. Henry Cabot Lodge of Massachusetts expressed the new attitude of the Congress: “... it is the general feeling of Congress, and as far as I can gather, among public opinion throughout the country, to provide all the
Table 5: Requests and Appropriations: September 1939–May 1940
| Date | Title | War Department Total | Ordnance Total |
| September–October 1939 | Tentative War Department program | $317,000,000 | $139,200,000 |
| February 1940 | War Department budget | 941,137,254 | 119,641,358 |
| 4 April 1940 | House appropriation bill | 828,999,094 | 118,067,993 |
| 29 April 1940 and early May | Additions recommended by Secretary of War and partial restoration of cuts made by House. | 103,878,630 | 11,199,700 |
| 16 May 1940 | War Department supplementary budget | 733,000,000 | 306,897,576 |
| 22 May 1940 | Passed by Senate | 1,823,554,624 | 436,296,991 |
money necessary for the National Defense, and so all you have to do is ask for it.2 The limited emergency was over. Recognition of full emergency was written into the appropriations act of June.
The Period of Unlimited Emergency
Peacetime procedures for obtaining Ordnance appropriations had always been time consuming; a lapse of eighteen months to two years was usual between preparation of fiscal estimates and receipt of funds voted by the Congress. The fall of France on 17 June 1940 necessitated a faster system. The annual appropriation for the War Department voted four days earlier would obviously not be enough. The process therefore adopted, and kept in operation for the next two years, was to pass supplemental acts. To form a basis for each request for supplemental funds, the General Staff prepared documents known as Expenditure Programs, giving detailed summaries of the specific quantities of items to be procured with the money to be voted in each act. It was a piecemeal system, a series of procurement demands and additions to appropriations. Not until the spring of 1942 was longer-range planning effected in the Army Supply Program stating requirements in terms of two or three calendar years.3
The Military Appropriation Act, approved 13 June 1940, and the supplemental acts that followed at brief intervals through the summer and fall, plus the supplemental act of 5 April 1941, brought the 1941 fiscal year figure for the Ordnance Department up to $2,977,913,998. Another $46,000,000 for liquidating 1939 contracts raised the total to $3,023,913,998. Table 1 shows the apportionment of money for various purposes. For the mechanized units alone, an Ordnance estimate in June called for $89,719,000 to purchase 1,690 medium tanks, 200 scout cars, 744 personnel carriers, 527 75-mm. howitzers, and 72 105-mm. howitzers,4 But, for all its readiness to provide necessary funds, the Congress did not accept Ordnance estimates without questioning how the money was to be spent. The regular appropriation and first supplemental funds were to equip the
Table 6: Appropriations for Ordnance Service and supplies army, by type of funds and by project: fiscal year 1941
| National Defense Act Supplements | ||||||
| Item | Total | Regular Appropriation 18 Jun 40 | First | Second | Third | Fifth |
| Type of Funds | ||||||
| Total | $3,023,913,998 | $436,196,991 | $193,915,085 | $1,442,162,645 | $38,441,426 | $913,197,851 |
| Contract authorization | 1,956,925,950 | 133,774,679 | 90,085,520 | 902,000,000 | 0 | 831,065,751 |
| Cash | 1,066,988,048 | 302,422,312 | 103,829,565 | 540,162,645 | *38,441,426 | 82,132,100 |
| Project | ||||||
| Total | 3,023,913,998 | 436,196,991 | 193,915,085 | 1,442,162,645 | 38,441,426 | 913,197,851 |
| 1939 Contract authorization, not distributed by project | 46,000,000 | 46,000,000 | 0 | 0 | 0 | 0 |
| Sub-total | 2,977,913,998 | 390,196,991 | 193,915,085 | 1,442,162,645 | *38,441,426 | 913,197,851 |
| Procurement of training ammunition | 41,556,458 | 9,685,777 | 3,106,500 | 0 | 28,764,181 | 0 |
| Procurement of Ordnance matériel | 325,953,890 | 42,454,343 | 107,118,585 | 103,637,940 | 3,403,001 | 69,340,021 |
| Preservation of Ordnance matériel | 31,410,293 | 6,108,640 | 1,250,000 | 0 | 5,644,553 | 18,407,100 |
| Preservation of ammunition | 9,772,710 | 9,772,710 | 0 | 0 | 0 | 0 |
| Research and development | 6,173,000 | 2,673,000 | 3,500,000 | 0 | 0 | 0 |
| Current expenses | 2,433,901 | 1,804,210 | 200,000 | 0 | 429,691 | 0 |
| Procurement planning | 2,955,080 | 2,955,080 | 0 | 0 | 0 | 0 |
| Ordnance schools for training | 241,100 | 41,100 | 0 | 0 | 200,000 | 0 |
| Gages | 290,500 | 290,500 | 0 | 0 | 0 | 0 |
| Preservation and augmentation of reserve for defense projects | 2,557,127,066 | 314,411,631 | 78,740,000 | 1,338,524,705 | 0 | 825,450,730 |
* Includes $2,000,000 reappropriated from National Guard.
full-strength Regular Army and the first 750,000 men enlisted through PMP. Money had to be spent in building powder plants, an ammunition loading plant, new storage facilities, a new Garand rifle plant, and in repairing arsenals. The Ordnance Department’s allotment under the Second Supplemental National Defense Appropriation Act was designed to provide for the entire PMP force plus critical items of reserve for a force of 2,000,000 men, and to supply armament for the aircraft program. Most of the Third Supplemental Act fund was assigned to ammunition procurement. Of the $913,197,851 of the Fifth Supplemental Act, about $800,000,000 represented critical items deferred from the Second Supplemental Act. Money for ammunition plants was the chief item of cash expenditure, but antiaircraft guns, fire control equipment, mortars, tank guns, tanks, tractors, and personnel carriers also were covered.5
From July 1941 to Pearl Harbor, the Congress continued to vote large Ordnance appropriations at fairly close intervals to cover increases in equipment, acquisition of facilities to produce that equipment, and additional manpower. In preparing the regular appropriation bill for the War Department for the fiscal year 1942, neither the Bureau of the Budget nor the Congress attempted to cut back the Ordnance Department’s requests. General Wesson found not a single item challenged.6 The largest part of the $1,339,390,595 allotted for Ordnance was cash for liquidating the preceding year’s contract authorizations, that is, paying for critical items contracted for in the 30 June 1940 program.7
When the German forces invaded the Soviet Union on 22 June 1941 and advanced rapidly, the considered judgment of competent observers was that Germany would conquer the USSR in six weeks or two months. Consequently, American political and military leaders were eager to speed industrial and military mobilization. On 11 July 1941 officers of the War Department again appeared before the House subcommittee, this time to explain the first supplemental requests for the fiscal year 1942. The $4,770,065,588 asked for the Army would procure critical equipment and ammunition for a 3,000,000-man force as well as large amounts of essential items. Some $84,000,000 was allotted to new storage facilities, including six ammunition storage depots.8
The First Supplemental National Defense Appropriation Act for 1942, passed on 25 August 1941, allowed the Ordnance Department $2,888,980,486—nearly as much as the total of all appropriations for Ordnance for the fiscal year 1941. (See Tables 2 and 3.) Yet a month later President Roosevelt wrote the Secretary of War that it was “perfectly clear that there should be a very substantial increase in ordnance items other than tanks,” and requested prompt submission of “proposals of the Army relative to increasing these ordnance items.”9 After five days of intensive work at all levels, the War Department on 2 October sent a list to the White House. The program proposed an expenditure of $320,000,000 for antiaircraft weapons, $222,000,000 for antitank weapons and artillery, and $1,408,000,000 for tanks and
Table 7: Appropriations for Ordnance Service and Supplies Army, By Type of Funds and By Project: Fiscal Year 1942
| Item | Appropriation Regular 30 June 1941 | First Supplemental 25 Aug 1941 | Third Supplemental 17 Dec 1941 | Fourth Supplemental 2 Feb 1942 | Fifth Supplemental 5 Mar 1942 | |
| CASH APPROPRIATED | ||||||
| Total | $1,339,390,595 | $2,888,980,486 | $3,719,883,246 | $1,547,948,529 | $13,252,200,000 | |
| Cash for obligation in FY 1942 | 235,464,645 | 2,888,980,486 | 3,719,883,246 | 1,547,948,529 | 12,332,200,000 | |
| Cash to liquidate prior year obligational authority | 1,103,925,950 | 0 | 0 | 0 | 920,000,000 | |
| NEW OBLIGATIONAL AUTHORITY | ||||||
| Type of funds | ||||||
| Total | 292,464,645 | 2,888,980,486 | 3,719,883,246 | 1,547,948,529 | 12,332,200,000 | |
| FY 1942 contract authorization | 57,000,000 | 0 | 0 | 0 | 0 | |
| Cash for obligation in FY 1942 | 235,464,645 | 2,888,980,486 | 3,719,883,246 | 1,547,948,529 | 12,332,200,000 | |
| Project | ||||||
| Total | 292,464,645 | 2,888,980,486 | 3,719,883,246 | 1,547,948,529 | 12,332,200,000 | |
| Procurement of training ammunition and target matériel | 73,587,087 | 0 | 23,173,992 | 0 | 0 | |
| Procurement of Ordnance materiel | 147,304,189 | 2,684,407 | 3,407,283 | 0 | 0 | |
| Preservation of Ordnance materiel | 31,797,680 | 0 | 3,193,360 | 0 | 0 | |
| Preservation of ammunition | 9,085,000 | 0 | 0 | 0 | 0 | |
| Research and development | 9,563,000 | 0 | 0 | 0 | 0 | |
| Current expenses | 8,000,000 | 0 | 0 | 0 | 0 | |
| Procurement planning | 864,080 | 0 | 0 | 0 | 0 | |
| Ordnance schools for training | 250,000 | 0 | 0 | 0 | 0 | |
| Gages | 1,509,750 | 0 | 0 | 0 | 0 | |
| Preservation and augmentation of reserve for defense projects | 10,503,859 | 2,886,296,079 | 3,690,108,611 | 1,547,948,529 | 12,332,200,000 | |
| Item | Sixth Supplemental 28 Apr 1942 | Total Appropriations | Transfers Between Projects | Transfers From Ordnance Funds | As Apportioned by Project 30 April 1942 | |
| CASH APPROPRIATED | ||||||
| Total | $543,721,283 | $23,292,124,139 | 0 | -$4,436,000 | $23,287,688,139 | |
| Cash for obligation in FY 1942 | 543,721,283 | 21,268,198,189 | 0 | -4,436,000 | 21,263,762,189 | |
| Cash to liquidate prior year obligational authority | 0 | 2,023,925,950 | 0 | 0 | 2,023,925,950 | |
| NEW OBLIGATIONAL AUTHORITY | ||||||
| Type of funds | ||||||
| Total | 543,721,283 | 21,325,198,189 | 0 | -4,436,000 | 21,320,762,189 | |
| FY 1942 contract authorization | 0 | 57,000,000 | 0 | 0 | 57,000,000 | |
| Cash for obligation in FY 1942 | 543,721,283 | 21,268,198,189 | 0 | -4,436,000 | 21,263,762,189 | |
| Project | ||||||
| Total | 543,721,283 | 21,325,198,189 | 0 | -4,436,000 | 21,320,762,189 | |
| Procurement of training ammunition and target matériel | 69,088,338 | 165,849,417 | -$44,936,248 | 0 | 120,913,169 | |
| Procurement of Ordnance materiel | 0 | 153,395,879 | +52,144,520 | 0 | 205,540,399 | |
| Preservation of Ordnance materiel | 87,267,199 | 122,258,239 | +2,244,343 | 0 | 124,502,582 | |
| Preservation of ammunition | 0 | 9,085,000 | -349,250 | 0 | 8,735,750 | |
| Research and development | 0 | 9,563,000 | +27,003,000 | 36,000 | 36,530,000 | |
| Current expenses | 15,883,481 | 23,883,481 | +35,253,417 | 0 | 59,136,898 | |
| Procurement planning | 0 | 864,080 | 0 | 0 | 864,080 | |
| Ordnance schools for training | 150,698 | 400,698 | +594,000 | 0 | 994,698 | |
| Gages | 1,500,000 | 3,009,750 | +7,500,000 | 0 | 10,509,750 | |
| Preservation and augmentation of reserve for defense projects | 369,831,567 | 20,836,888,645 | -79,453,782 | -4,400,000 | 20,753,034,863 | |
Table 8: Appropriations for Ordnance Service and Supplies: Fiscal Year 1943
| Project | Regular 2 Jul 42 | War Dept. Reserve | Net Total |
| Procurement and Production | |||
| Procurement Planning | $864,080 | 0 | $864,080 |
| Procurement of Ammunition | 2,706,763,472 | $270,643,000 | 2,436,120,472 |
| Procurement of Ordnance Materiel | 6,850,295,085 | 677,056,030 | 6,173,239,055 |
| Procurement of Gages and Gage Laboratory Equipment | 3,763,000 | 376,000 | 3,387,000 |
| Operating (Including Maintenance and Repair of Chattels) | |||
| Preservation of 0. S. & S. A. Materiel | 108,971,690 | 4,102,300 | 104,869,390 |
| Preservation of Ammunition | 3,840,725 | 419,000 | 3,421,725 |
| Current Expenses of the Ordnance Dept | 211,489,497 | 26,894,280 | a 181,345,217 |
| Education and Training | |||
| Ordnance Schools and Training | 912,688 | 0 | 912,688 |
| Research and Development | |||
| Research and Development | 46,419,000 | 0 | 46,419,000 |
| Departmental Overhead | |||
| Departmental Overhead Chief of Ordnance | 15,000,000 | 15,000,000 | 0 |
| Total | $9,948,319,237 | $994,490,610 | $8,953,828,627 |
Excludes $3,250,000 transferred to General Depots, SOS.
tank guns,10 This high-speed planning typified the preparation of the 1942 financial and rearmament programs under way when the attack on Pearl Harbor came.
From June 1940 to 7 December 1941 Ordnance appropriations were:11
| Over-all, fiscal year 1941 | $2,977,913,998 |
| “Regular” 1942 appropriation | 1,339,390,595 |
| First Supplemental, 1942 | 2.888,980,486 |
| TOTAL | $7,206,285,079 |
After America’s entrance into the war, seven billion dollars for munitions ceased to be a staggering figure. Once the nation was actually at war, money was no major consideration, The Ordnance Department could count on having as much as it needed. But before Pearl Harbor the United States was formally at peace. In the seventeen months of the unlimited emergency, the Congress voted the Ordnance Department fourteen times the total given the Department in the preceding twenty years.
Shipment of Ordnance “Surplus” After Dunkerque and Its Consequences12
Preliminaries of Lend-Lease
While the Congress was preparing to vote the first huge defense budgets in late
May 1940, American leaders took one of the greatest peacetime gambles in American history. As Belgian and French resistance gave way before the German attack and the British Expeditionary Force suffered staggering losses, the War Department faced the question of whether the United States should send large quantities of American reserve stocks to bolster the English and French. Several weeks before the fall of France the President, after careful study of the complex problem and upon advice of military and civilian advisers, decided to gamble upon the survival of Great Britain and France and to send them American equipment.13 It required a ruling of The Attorney General to clear the way for this transfer of matériel. By legislation enacted in 1919 and 1926, military supplies declared to be surplus to needs of the War Department could be sold, and unserviceable or deteriorated ammunition could be exchanged for new. These laws The Attorney General declared applicable to the transfer, but the “surplus” stocks must be sold to private citizens, who in turn could sell to foreign governments. The United States Steel Corporation agreed to have one of its subsidiary companies be the agent in the deal. This roundabout procedure thus acquired some color of legality.
Determining exactly what military supplies could best be spared fell mainly to the Ordnance Department. The German Army reached Abbeville on the Channel on 21 May. Early on the morning of 22 May General Marshall called General Wesson to his office, outlined the problems of determining “surplus,” and asked for a list of ordnance items and quantities that could be shipped to England. The Chief of Ordnance straightway called his top aides into conference to draw up the list of equipment that “could be released without prejudice to the United States National Defense.” Tentative agreement came quickly, and General Wesson later the same day carried the resulting memorandum to General Marshall’s office.14
During the next two weeks the Nazi troops rolled on to other spots along the Channel. The British, mustering 600 ships, yachts, and small river craft, succeeded in evacuating about 335,000 men from Dunkerque, but left behind most of their arms and all their heavy ordnance. In Washington frequent conferences were held to iron out the details of transfer of American “surplus.” To complicate matters an Allied commission kept raising its demands. For example, early in June it requested 250,000,000 additional rounds of .30-caliber rifle ammunition; General Wesson considered 100,000,000 the limit. As a compromise, 130,000,000 rounds was finally settled upon. Decisions involving a wide range of ordnance matériel were necessary, but by 4 June the program for shipment was virtually complete and had General Marshall’s approval. That day the Equipment Division of the Ordnance Department Field Service sent its first batch of telegrams to field installations ordering immediate shipment of the listed items to Raritan for overseas transit.15
The capitulation of France later in June meant that all ordnance “surplus”
matériel would go to England. Within the next two months the British received 615,000 Enfield rifles, 25,000 Browning automatic rifles, BAR’s, with 1,000,000 20-round BAR magazines, 86,000 machine guns, 895 75-mm. guns, 138,000,000 rounds of .30-caliber ammunition, 1,075,000 rounds for the 75’s, and lesser amounts of smokeless powder and TNT. This matériel comprised a very important accretion to British defensive powers at a most critical period.16
However wise the transfer of this matériel proved to be ultimately, the immediate consequences were a loss of equipment available to the United States Army. The value of the munitions first shipped was set at $37,100,000, of which nearly $22,000,000 was in ammunition. Later, as additional matériel was sent, the total reached $41,289,130. Though the purchase money would go into replacements, production could not be contrived overnight. The tanks that were shipped were obsolete; it is true the Enfield rifles could have been used in the United States only for training; and some of the 75-mm. guns and 76,000 of the machine guns, an assortment of British Marlin, Vickers, and Lewis models stored away and practically forgotten after World War I, would not have been issued to the US Army in any case. But the Browning automatic rifles were badly needed. Shipping 25,000 BAR’s reduced the supply of the US Army by nearly 30 percent, and the 895 75-mm. guns came from a total of 5,131. The ammunition sent was officially labeled deteriorated but was still usable,17
After subtracting the “surplus,” ordnance matériel on hand at the end of June 1940 looked meagre. Exclusive of a few big guns mounted for seacoast defense, computation showed twelve types of artillery available in the following quantities:
|
Artillery,18 |
|
| Antiaircraft gulls: | |
| 37-mm. | 8 |
| 3-inch | 807 |
| 105-mm. | 13 |
| Howitzers: | |
| 75-mm. | 91 |
| 105-mm. | 14 |
| 155-mm. | *2,971 |
| 8-inch | 475 |
| 240-mm. | 320 |
| Tank and antitank guns: | |
| 37-mm. antitank | 228 |
| 37-mm. tank | 184 |
| Field guns: | |
| 75-mm. (all models) | 4,236 |
| 155-mm. (all models) | 973 |
| Mortars | |
| 81-mm. | 150 |
| 3-inch trench | 1,226 |
* Includes 599 HiSpeeded
Small arms were in better supply: about 67,000 .30-caliber Browning machine guns of all types, 4,421 .50-caliber of all types, 62,430 Browning automatic rifles, 895,738 Springfield rifles, 44,170 semiautomatic rifles, and 371 submachine guns. There were 468 tanks, 511 scout cars, and just over 1,200 tractors and auxiliary vehicles.
The ammunition situation was particularly acute. On 5 June 1940 there were 588,000,000 rounds of .30-caliber ball ammunition in existence; the shipment of 130,000,000 rounds to Great Britain cut that figure by 22 percent. By September additional shipments and Army consumption reduced the rounds on hand to 370,000,000, No .50-caliber ammunition was sent. The 1,075,000 75-mm. shells shipped left the United States Army with 3,625,000 rounds, though there were also about one and a half million unloaded cases. There were 124,108 loaded bombs of all types, 27,972,979 pounds of smokeless powder for guns smaller than 10-inch, and bulk explosives in greater quantity. But the 17,716,000 pounds of TNT released to Great Britain came out of a manufacturing surplus of only about 20,000,000 pounds.19
the fall of 1940, 329 obsolete tanks were turned over to Canada and 212 to Britain to be used for training, and some months later an additional 50,000,000 rounds of .30-caliber ammunition and most of the remaining stock of Enfield rifles went to the United Kingdom. Some equipment was released to other countries in the course of these months, but the quantities were comparatively small. Between June 1940 and February 1941 about 1,135,000 Enfields and 188,000,000 rounds of ,30-caliber ammunition were sent Great Britain. Except for the rifles, the transfer cost the United States much matériel that could be called “surplus” only by a long stretch of the imagination.
Nevertheless, apart from the long-term advantage of strengthening British defense, the Ordnance Department did benefit somewhat from the transfer. Of some importance was the effect of the agreement to have British .30-caliber ammunition production released to the Ordnance Department till the 50,000,000 rounds shipped in February was replaced.
This arrangement gave the US Army new Remington ammunition at an earlier date than would otherwise have been possible. Furthermore, the revelation of the paucity of all ammunition reserves hastened action to expand manufacturing capacity. And finally, the Field Service learned in this first small-scale dress rehearsal that it must strengthen its system of distribution and maintenance. While packaging and shipping the equipment to Britain was officially handled by the United States Steel Export Company, this agent employed Field Service depot workmen. The experience thus gained was useful.20
Subsequent Foreign Aid: Procurement
By the end of 1940 munitions orders placed with American companies by the British Purchasing Commission amounted to some 3.2 billion dollars, of which the largest sums were for machine tools, aircraft, and ordnance.21 Though these orders were invaluable in creating new plant capacity and initiating American firms into ordnance manufacture, they posed fresh problems to officers responsible for re-equipping the United States Army. Companies that had contracted with
foreign governments usually could not accept large Ordnance Department contracts. The plant allocation system worked out during the peace years therefore threatened to fall apart before industrial mobilization was well started.22 Unfilled British orders, amounting to some 90 million dollars, at the end of June 1940 pre-empted very considerable capacity of the producers of forgings and tank transmissions, machine guns, ammunition, and explosives. Still more difficult was the problem of equipping new facilities because of large foreign machine-tool orders. British policy before mid-1940 deliberately aimed at obtaining tools to use in plants in the United Kingdom rather than at purchasing matériel manufactured in the United States.23 When the Ordnance Department at last had money to launch a big procurement program, the 114 unfilled machine-tool orders placed earlier by the British Purchasing Commission constituted a stumbling block. The creation of the National Defense Advisory Committee with power to veto all production contracts of more than $150,000 somewhat eased this problem for the Ordnance Department after midsummer 1940, although the Army and Navy Munitions Board Clearance Committee had for months scrutinized foreign orders in an attempt to prevent interference with the American military procurement program,24 “The creation of additional production capacity to meet the desired program,” wrote Maj. Gen. James H. Burns in September, “is controlled primarily by the available production of machine tools. The output of machine tools analysis shows demand of the United States and Great Britain about twice the present yearly supply.”25 A priorities system eventually worked reasonably well, but not until the Chief of Ordnance vigorously protested the allocations to Ordnance.26 In the last analysis the most serious problems of equipping the US Army stemmed from the delays in developing new production facilities. For small arms ammunition these delays were particularly costly.27
As long as foreign orders were for matériel differing in design from standardized American equipment, the Ordnance Department could consider the experience American producers were gaining only partially helpful. But when late in the fall of 1940 the “battle of the types” was won and the British agreed to accept American-type equipment, American firms tooling up for munitions work were preparing for production that could be immediately switched to the United States Army. In a very few cases the United States was persuaded to adopt British weapons, but exasperating delays grew out of the failure
of the British to send complete drawings and specifications,28 Only a few “non-common” items were to be made to British specifications.29 In fact, the Anglophile in 1940 might have contended that this arrangement left the British to pay the bill for tooling up for American military production. Meanwhile, by agreement of officials in higher echelons than the Ordnance Department Industrial Service, foreign orders placed before the passage of the Lend-Lease Act of 1941 were ordinarily not to be set aside for Ordnance Department work. Formal provisos guaranteeing priority to PMP critical items were not invoked.30
Passage of the Lend-Lease Act in March 1941 brought a new administrative system.31 Foreign procurement programs were henceforward to be financed by the United States Government and carried on by its departments and agencies. After the United States entered the war, lend-lease money was included in Army appropriations, and consequently the Ordnance Department contracted for, inspected, and shipped matériel for foreign aid by the same procedures that it employed in supplying the United States armed forces. But before Pearl Harbor the Congress made special appropriations for lend-lease and the Ordnance Department found itself in the awkward position of having to run two production programs. Inasmuch as Army matériel was mostly for use in training the American forces now expanding under Selective Service whereas lend-lease equipment had to be shipped overseas, the twofold distribution was complicated. Keeping two simultaneous production schedules separate soon proved so wasteful of time in getting items completed that the Ordnance Department resorted to juggling United States Army and lend-lease contracts on items common to both and to making the allocation of money a matter of accounting. For a time the Defense Aid Requirements Committee, established to deal with ordnance matériel, reviewed foreign requests and attempted to coordinate them with American requirements, but after October 1941 a special unit under Maj. Paul M. Seleen was added to the Executive Branch of the Office, Chief of Ordnance, to handle these.32 Because the Ordnance Department was more concerned than any other service with procurement of machine tools, throughout the war all foreign requests for machine tools went through the Ordnance Department War Aid Section.33 While planning lend-lease production programs so they would dovetail with the United States PMP was the responsibility of the General Staff and
Under Secretary of War, detailed information and advice on proposed ordnance schedules had to come from the Ordnance Department. Ordnance recommendations might be overruled for political or other reasons, but they carried great weight.
The expansion of munitions production and rapid increase in facilities to achieve it were the most urgent parts of the task the Ordnance Department faced in 1940 and 1941. Industrial mobilization planning in the preceding twenty years had laid the ground carefully so that Ordnance officers and civilian chiefs were ready to start the machinery of large-scale procurement as soon as the money for it was appropriated. But peacetime planning had not included any program of foreign aid, and lend-lease commitments in the months before the United States became a belligerent consequently imposed particular procurement problems. The four most important were establishing balanced production, contriving manufacture of items not used by the US Army, handling “bits and pieces” requisitions, and administering the program of shipments sanctioned in the Lend-Lease Act.
Keeping production in balance so that all component parts are ready for assembly at the same moment is difficult under any circumstances. The complications of this procedure that arose after the passage of the Lend-Lease Act are well illustrated by the situation in tank production. Early in 1941 the Baldwin Locomotive Company and the American Locomotive Company each had contracts from the Ordnance Department for 685 medium tanks and from the British Tank Commission for a like number. The American Locomotive Company, moreover, had agreed to build in Canada an additional number for the British, and the Pullman-Standard Company and the Pressed Steel Car Company had each accepted British orders for 500, The Ordnance Department’s policy was to buy complete tanks and supply as “free issue” only government-made radio equipment, guns, and engines. The British, on the other hand, negotiated separate contracts for armor plate, suspension wheels, and other major components. Unhappily, the British Tank Commission had failed to place a contract for engine transmissions.34 Without transmissions no tanks could be assembled.
As noted above, when the confusions and delays became inescapable, the Ordnance Department abandoned the attempt to keep foreign orders and Army orders separate. With all the prime contractors using subcontractors for parts, manufacture of components was under way in many different plants and localities. Output of complete tanks could only be speeded if assembly could proceed as soon as parts were ready, irrespective of whether they were made for lend-lease or Ordnance Department orders, Presidential approval of this procedure was announced in September 1941.35
The second problem confronting the Ordnance Department on lend-lease orders concerned manufacture of non-common items. The volume of these was not large because of British acceptance of American types of most equipment, but the exceptions to the general rule created difficulties of procurement out of all proportion to either volume or money value.
Furthermore, upon the recognition of China and later the USSR as lend-lease countries, their wishes for munitions meeting their own special specifications had to be considered. The Ordnance Department Defense Aid Branch assembled for the War Department Defense Aid office the information bearing upon the requests for non-common items. If procuring these severely threatened schedules for common items, the Ordnance Department recommended refusal of the requests. Higher authority made the decision. When requisitions for non-common items were accepted, the Ordnance Department undertook to find contractors for the jobs. Foreign blueprints of design and specifications had to be obtained, and sometimes special gages. The Ordnance Department had to see that light tanks for the British were built with special British-designed turrets, that tanks for Russia had diesel instead of gasoline engines; the Chinese wanted 7.92-mm. ammunition, the Russians a special nitroglycerine powder. All this at best was time consuming, and time was short. When the nonstandard items requested constituted an order, placing the order where it would not interfere with the execution of larger orders was particularly difficult.
“Bits and pieces” requisitions for standard matériel also created problems in 1941. Tiny orders made wholesale purchase impossible. An extreme example was a foreign government’s request for ten yards of cheesecloth. On that occasion Col. A. B. Quinton, Jr., reached into his pocket, pulled out a dollar bill and offered it to anyone who would go to a local department store to make the purchase direct.36 Unfortunately, more specialized matériel was a different matter. Representatives of foreign governments, on learning from depot officers that certain items were on hand, were prone to submit urgent requests for all or part of the supply. Refusal of such requests was often not possible for political reasons, but piecemeal replacement of the supplies released was uneconomical. The solution finally reached was twofold: first, to reduce the frequency of these requests by forbidding American officers to divulge to foreign agents any information about the stocks available, and, second, when “bits and pieces” requisitions were authorized, to divert from existing Army stores or current production the quantities requested but to wait till total “diversions” mounted to a sizable lot before placing a production order for replacement.37
The fourth complication arose out of the continued shipment of “surplus” equipment to lend-lease nations. The Lend-Lease Act expressly sanctioned transfers of supplies produced on appropriations antedating 11 March 1941, provided the Chief of Staff declared them surplus to the defense needs of the United States and provided the total value did not exceed 1.3 billion dollars. The “Billion Three” shipments, as they came to be called, covered almost all the first lots of matériel sent to the Soviet Union. The First (Moscow) Protocol putting the terms of the agreement on paper was endorsed by President Roosevelt on 1 October 1941. The United Kingdom not only received supplies direct from United States stocks
immediately after enactment of lend-lease but also, following the British withdrawal from Greece in May, a second large consignment of “surplus,” sent to augment British matériel in the Mediterranean and Middle East,38 No one who knew the facts of the strategic situation doubted the wisdom of the new transfers, but the Ordnance Department was obliged to recast hastily its procurement schedules whenever fresh disasters on the battlefronts or sinkings of vessels carrying machine tools, machinery, and munitions occurred. This virtual commandeering of American matériel for foreign aid was, of course, to endure through much of the war,39 but replacement was less difficult after the United States’ entry into the war enlisted the whole-hearted cooperation of all American industry in the fight to keep supply lines full. The release of “surplus” military supplies just after Dunkerque was more dramatic than the subsequent transfers; on the first occasion the need arose more unexpectedly, and the response of the United States was then unprecedented. Still, the effect of later transfers was similar. Indeed, difficulties for the Ordnance Department in the later pre-Pearl Harbor transactions were greater, as manufacturing facilities ready to accept munitions orders became glutted with work and many peacetime procedures of procurement still obtained. Considering that over nine billion dollars in ordnance matériel was shipped to lend-lease nations before 1945, the miracle is not that troubles developed but that military procurement for the United States could proceed at all.
Field Service and Foreign Aid
While vigorous endeavors to expand production went forward, research and development work and the storage problem received relatively little attention. Because development of new weapons was less important than having adequate supplies of matériel already standardized ready at the earliest possible moment, all through 1940 and 1941 effort was deliberately concentrated upon expediting output of standard items. Work upon new experimental models was not canceled, but its priority was not high.40 Field Service responsibilities, on the other hand, expanded at once. As the training camps opened after the inauguration of the Selective Service Act, depot operations became active and the mounting tasks of preparing shipments to foreign governments both before and after the passage of the Lend-Lease Act required many more people to handle them. The corresponding need for a series of new depots to store the matériel that the enlarged procurement program must accumulate was not immediately understood. General Staff strategic planning through 1940 was based solely upon defense of the American continent, not upon overseas offensives. Depot operations accordingly were mapped out without regard to supplying armies overseas.41 When the foreign aid program was superimposed upon this scheme, a number of changes became imperative.
In the fall of 1939 plans for increasing Ordnance storage facilities had called for new buildings at Ogden, Utah, for both ammunition and general supplies, and at Savanna, Illinois, for ammunition. Six months later additional storage and repairs for Field Service installations still stood sixteenth on the list of undertakings deemed essential to prepare the Ordnance Department for emergency, and even after the June 1940 Munitions Program was launched, the General Staff was proposing to rent commercial warehouses rather than construct new government depots.42 That this procedure was unwise was by then clear to Ordnance Field Service. Strong representations made by the Ordnance Department persuaded G-4 of the General Staff that new depots were a necessity. War Department policy, decreed in 1937, limited location of depots and new munitions plants to sites within areas considered strategically safe from bombing, though the Chief of Ordnance succeeded in getting approval for placing some depots nearer the seaboard than the General Staff was originally willing to sanction. The result was selection of eight sites in the fall of 1940 for the Ordnance Department’s “A” Program, creating a ring of permanent depots, none placed nearer than 200 miles to the country’s borders.43
Construction began in February 1941 on the Umatilla, Oregon, depot, and on the other seven depots that summer. First to be activated were Umatilla, in the northwest corner of the “safe” zone; Wingate, New Mexico, in the southwest; Portage, Ohio, in the northeast; and Anniston, Alabama, in the southeast. While not completed, these four were ready for use by the time of the attack on Pearl Harbor, thereby providing some 8,000,000 additional square feet of space, over 5,000,000 of it for ammunition. Furthermore, the construction and layout of the new depots, modern in every respect, permitted concentration of large quantities of matériel and far more efficient operations than when stocks were scattered among twenty or thirty depots. These facilities doubled ammunition storage capacity, but adequate storage for general supplies had not as yet been provided. For these the General Staff in the summer of 1941 was still expecting to use commercial facilities. Again the Ordnance Department protested. During the second half of 1941 Field Service worked out its “B” plan for eight more depots. G-4 approved, and construction began early in 1942.44
The first plans for expanding storage capacity had thus been conceived before foreign aid shipments were a consideration. Yet before the building program actually got started, assembling matériel to be sent to the British was beginning to complicate operations at Ordnance depots. After lend-lease was enacted these complications multiplied. Question arose in the late spring of 1941 of the legality of storing in US Army depots packaged supplies bought by the British from commercial concerns. Temporarily, the Ordnance Department arranged to lease to the British some depot space, but this was no
permanent solution of the problem.45 Submarine warfare made shipping schedules so irregular that transport of completed items direct from factory to the docks would have created intolerable congestion at the ports. Furthermore, some equipment required assembly of complementary items. Consequently, “in-transit” storage was unavoidable, either in regular Army depots or occasionally at commercial warehouses that the British had acquired. In May 1941 the Chief of Ordnance described the situation:
Theoretically at least a shipload of tanks should, as far as practicable, be by organization. The shipment should include not only tanks but all accessories, essential extra parts and all allied equipment. It has been necessary for the Ordnance Department to utilize in a manner . . , far from ideal available storage space. At Raritan Arsenal, for example, nowhere is there available a covered floor space essential to the gradually increasing task of receiving, sorting and checking equipment to see that ships can be loaded from the standpoint of organization equipment so that as promptly as possible after reaching the other side the equipment can be put to use.46
The congestion at British ports on the west coast of Great Britain during this period necessitated taking every possible measure in the United States to expedite unloading in the United Kingdom.47 The result was a decision ordinarily to exclude lend-lease matériel from regular Army depots in order to prevent clogging of operations there, and to establish intransit storage depots for lend-lease. The first intransit storage depot opened in midsummer of 1941. Here lend-lease as well as some United States Army matériel waiting for shipping space was stored, and Ordnance personnel assisted a British contingent in assembling equipment. Eventually the Treasury Department allotted lend-lease money to building eleven depots for lend- lease supplies. Five of these were in time turned over to the Ordnance Department to run without special differentiation between Army and lend-lease matériel.48
That the depot programs of 1939 and 1940 were inadequate by 1941 was due far less to the scheduling of large-scale foreign aid than to the General Staff concept of continental defense.49 As realization grew that the United States would almost surely be drawn into the war, earlier plans were revised, but not before Ordnance Field Service was beginning to suffer from lack of depot facilities. Storage was only one of many Ordnance responsibilities for maintenance and distribution of fighting equipment, but within the zone of the interior during the defense period and, indeed, long after, storage constituted a peculiarly acute problem. Foreign aid added to, but did not create, these difficulties. In fact, the prewar experience gained in handling foreign aid matériel was invaluable later.