Lessons from WWII: When Only a Czar Will Do

Following up on previous "lessons from WW2" posts about Harry Truman's pursuit of war profiteers, and Henry Kaiser's production miracle. Behind those bright lights were plenty of sparks.

Ramping up the arsenal of democracy in 1940 and 1941 set off fights over money and raw materials that dragged in just about everybody: old and new federal agencies, an Army and Navy intensely jealous of each other, industries, farm-belt politicians, unions, and Congress.

One of the first to hit the headlines concerned the feedstocks for synthetic rubber. Rubber was critical to defense equipment and transport, but Japanese occupation of the Dutch East Indies had cut off 95 percent of natural rubber shipments to the U.S. How to fill a quarter-million-ton-per-year shortfall with synthetic rubber set off a very public battle about which production process (and therefore which feedstock) to use.

Should the new synthetic-rubber factories depend on ethanol from patriotic American corn farmers, or oil from patriotic American oil producers? Arguments went beyond lobbying to a fistfight between the rubber administrator and a newspaper publisher in a swank Washington club.

Nobody was really in charge of the U.S. war effort -- at first. Take the single commodity called petroleum: by early 1942, six “alphabet agencies” competed to direct the production and consumption of products from crude oil. Harry Truman (along with Republican leader Wendell Willkie) called for one man at the top to oversee decisions and to be responsible for the outcome.

At their urging, FDR finally decided to entrust all war production planning to a single man, a czar of czars, former Sears & Roebuck executive Donald A. Nelson. Industrial historians say this decision was the turning point of the entire war effort, though FDR had delayed the decision almost to the point of disaster.

Nelson oversaw many sub-czars, such as Admiral Jerry Land, the head of the Maritime Commission. Land decided how many ships the U.S. needed, who would build them, what cargoes they would carry, and when they would sail. Land also commandeered all civilian-owned ships (both U.S. flag and also foreign ships that happened to be in our ports) for the duration.

After Nelson took over, the war mobilization became one big tent rather than a scattering of little tents. That is, there was plenty of work and opportunity for all Americans and most businesses, but under a single overarching plan.