As the provenance of the key weapons used at Midway suggests, the winning American war effort in 1942–45 depended heavily on munitions that had been designed—and, in some cases, even procured—in the 1930s. In hindsight, of course, these early activities seemed inadequate. But during the two years before the German offensives of spring 1940, the United States accomplished a first phase of industrial mobilization. Thanks to American, French, and British orders in 1938 and 1939, the aircraft and naval shipbuilding industries started 1940 in excellent financial health, and in the midst of a major expansion.
This first phase of industrial mobilization took place in the context of very difficult political and economic circumstances, domestically and internationally. In early 1938, the U.S. economy was still in a serious recession, which had begun in the middle of the previous year. Many companies were losing money. Although a recovery started before the end of 1938, the Great Depression lingered. The national unemployment rate, which had been terribly high for the entire decade, would remain close to 16 percent until 1940.5 Outside the United States, the Depression had generally been less severe, but the political situation was harrowing. By October 1937, when President Roosevelt offended American isolationists with his “quarantine speech,” suggesting the need for more active efforts to contain international aggression, the Spanish Civil War was under way; Mussolini’s Italy had invaded Ethiopia; and Japan had pushed into China. In March 1938, Germany, led by Adolf Hitler, annexed Austria. By summer 1938, it looked as if Europe was only days away from the unthinkable: another terrible war among the great powers.
The bleak international situation in 1938 made it possible for the American naval shipbuilding and aircraft industries to expand, even before the European war broke out in September 1939. They did so through a combination of domestic and foreign orders. In the case of warships, one key step was a new, $1.1 billion Fleet Expansion Act, passed by Congress in May 1938. This bill allowed the Navy to begin to order vessels that would make the U.S. fleet expand by 20 percent.6
By passing the naval expansion act in early 1938, Congress reaffirmed the strong support that it had provided the Navy since Roosevelt entered the White House in 1933. In that chaotic year, Roosevelt managed to use some of the first New Deal appropriations to pay for thirty-two new warships. But this step paled in comparison with the legislation passed by Congress the following year. Sponsored by Georgia Democrat Carl Vinson, the Navy’s greatest friend in Washington, the Vinson-Trammell Act of 1934 allowed the Navy to expand the fleet to the maximum level allowed under the Washington and London naval treaties. This meant 102 additional combatant vessels, which were to be procured over the following eight years.7 Navy spending in the later 1930s averaged over half a billion dollars a year. This was 50 percent more than it had been before 1934 and slightly above the annual naval expenditures of Great Britain.8
For the fragile naval shipbuilding industry, which had suffered from the end of World War I through the first part of the Depression, the 1934 act provided much-needed cash, as well more stability. In the private sector, only six companies were still making major combatant vessels, including battleships, cruisers, carriers, destroyers, and submarines. The surface vessels were made by Newport News (the builder of the carriers at Midway); the New York Shipbuilding Corporation; the shipyards of the Bethlehem Steel Corporation; the Bath Iron Works; and a U.S. Steel Corporation subsidiary called Federal Shipbuilding. The only private-sector supplier of submarines was the Electric Boat Company, located in Connecticut. Most of these yards had served as Navy contractors since the 1890s, when they had helped build the country’s first world-class steel navy.
Because these for-profit naval shipbuilders managed to survive the doldrums of the interwar period, they stood to gain from new orders. However, they also contended with an unusual degree of direct competition from the public sector. This division of labor continued under Vinson-Trammell, which required that half of the new combatants be built in the public yards. The public-private mix prevailed also in the production of naval ordnance, just over half of which came from the Navy’s own plants during the late 1930s. Certainly, the Navy acted as if it expected its own yards to function as state-of-the art production facilities, capable of competing with the best of the private sector. During the 1930s, the Navy spent $180 million to improve its own eight shipyards. By 1939, they employed 46,000 civilians, or over a third of all American shipyard workers. Like the private yards, the Navy’s in-house facilities were often led by talented engineers, many of whom had advanced degrees in engineering or ship architecture from MIT.9
For the private and public shipyards alike, Vinson-Trammell meant steady business, if not an impetus for expansion. During the second half of the 1930s, Electric Boat and the Portsmouth Navy Yard were each able to build two or three submarines a year. Two new destroyers a year were turned out by at least four builders—Bath Iron Works, Bethlehem Steel’s Fore River (Quincy, Massachusetts) yard, Federal Ship, and the Charlestown (Boston) Navy Yard. In October 1937, the Brooklyn Navy Yard laid the keel for the North Carolina, the first new American battleship to be built since the signing of the Washington Naval Treaty in 1922. Altogether, the congressional appropriations from 1933 to 1937 allowed the Navy to order two battleships, three aircraft carriers, three heavy cruisers, nine light cruisers, sixty-three destroyers, and twenty-six submarines.10
The builders of warships received another boost in May 1938, with the passage of the Fleet Expansion Act. When the war started in Europe in September 1939, American shipyards were in the midst of building two new aircraft carriers, eight battleships, five cruisers, and three dozen destroyers. Of the 1.3 million tons worth of warships available to the Navy in 1940, half had been added to the fleet since 1934.11
The new contracts went to the handful of public and private yards that had been serving the Navy throughout the interwar period. In early 1939, Newport News received the order for the new aircraft carrier Hornet, along with one of the four new 35,000-ton South Dakota–class battleships. The other three ships in this class, which would not enter service until after Pearl Harbor, went to New York Ship, Bethlehem–Fore River, and the U.S. Navy Yard at Norfolk, Virginia. In mid-1939, the Navy ordered two bigger battleships, of the new 45,000-ton Iowa class, to be built in its own yards in Philadelphia and Brooklyn. Among the smaller combatants ordered under the 1938 act were six light cruisers, sixteen destroyers, and fourteen submarines. For Bath Iron Works and the Electric Boat Company, which specialized in destroyers and submarines, respectively, the new orders pushed 1939 sales to $15 million, double what they had been two or three years earlier.12
Because warships ordinarily took two to three years to complete, the 1938 orders determined the size and shape of the U.S. Navy fleet that was available for service immediately after Pearl Harbor. None of these orders in the 1930s could fully prepare the Navy’s top shipbuilders for the sort of expansion that they would undertake in wartime, when they would grow temporarily into truly big businesses. However, the 1930s contracts did allow a handful of expert shipyards to thrive. Bath Iron Works, where employment had fallen to fewer than three hundred workers in 1932, boasted nearly two thousand on the payroll by 1938. Newport News saw its workforce grow from about 7,300 in 1937 to 11,500 by 1940.13
Besides enlivening individual yards, the rise of warship orders in the 1930s also strengthened the small network of public and private organizations that constituted the naval shipbuilding industry. This network went beyond the half-dozen private-sector shipbuilders and the eight U.S. Navy yards. Besides these shipbuilders, key players included the Navy’s Bureau of Construction and Repair and its Bureau of Engineering, well-informed customers that helped determine the specifications for the vessels. Also critical were private ship architects, the most important of which was Gibbs & Cox, based in New York City. Together with designers at the private shipbuilders and the Navy yards, Gibbs & Cox helped draft new hull designs that could be integrated with improved steam turbine power plants, using high pressures and high temperatures. The builders of these turbines, including General Electric (GE) and Westinghouse, ranked among the most important members of the naval-industrial complex. Thanks to the Navy orders of the 1930s, this tight network—comprising shipyards, designers, engine makers, and Navy procurement bureaus—started World War II able to draw upon several years of collaboration and familiarity.14
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