1. Historical sketch.

INTRODUCTION

Complicated weapons and machines are used up rapidly in war. Armies and navies* must not only be well supplied initially, but maintenance must be adequate and continuous. Thus, the success of a modern fighting force is directly and immediately dependent upon the ability of the Nation's resources to satisfy promptly its requirements in munitions. In addition, throughout the duration the war the Nation must continue to provide all the material things upon which the health and well-being of its population depend. War is no longer simply a battle between armed forces in the field-it is a struggle in which each side strives to bring to bear against the enemy the coordinated power of every individual and every material resource at its command. The conflict extends from the soldier in the most forward lines to the humblest citizen in the remotest hamlet in the

rear.

Prior to 1914, the tremendous influence that industrial and economic factors would exert in modern war were but dimly appreciated. Since the World War, however, many thoughful students have devoted to these things a great amount of study and research. Exhaustive accounts of almost every kind of industrial and economic activity in that war are now available. These serve as a basis for the deduction of principles applicable to this phase of modern warfare.

The industrial experiences of most of the great belligerent nations during the World War were in many important particulars strikingly similar. The following observations apply with almost equal force to each of these countries:

Adequate provision to supply the munitions needed by the armies in battle had not been made for more than a brief period of time. The amounts of ammunition and supplies consumed daily on the battlefield far exceeded pre-war estimates.

It was quickly found necessary to begin exercising a governmental control over the Nation's raw materials, labor, power, transportation systems, and producing facilities, and to direct their use for those purposes which would best meet the immediate needs of the Nation as a whole.

Extraordinary demands for certain types of materials and services occasioned violent disturbances in prevailing price levels and necessitated governmental measures to fix or control prices. These measures varied both in scope and kind in different countries.

The administrative machinery for controlling national industry was set up as a separate and independent governmental agency, directly responsible to the supreme executive head of the state.

It was found that a high national morale was needed to secure coordinated effort by a whole population. Methods adopted to

To save repetition, the term "armed forces" and the adjective "military", when used, include both the Army and the Navy.

direct and control the resources of the country had to appeal to the people as necessary, fair, reasonable, and effective.

The industrial and economic fabric of the enemy was attacked in every possible way. (The Allies did this by physical blockade and pressure upon neutral countries; the Central Powers did it by launching submarine attacks on enemy sea commerce.)

Methods used to direct the industrial effort had to be extemporized in the heat of conflict. The folly of permitting the country to drift into war without having made provision for prompt mobilization of industry was brought home to the people and to their leaders. The country was saved, initially at least, from disastrous results because the enemy, through a like failure, was unable to take full advantage of the situation. Specifically, in the case of the United States, grave consequences during the preparatory and readjustment period were avoided because of the protection given by the armies and navies of our allies. In all cases, however, improvised methods were unable to prevent extravagance and delays in procuring munitions or to prevent profiteering in some quarters and unnecessary suffering in others.

During the past decade each of the world powers has attempted to devise a system under which, in the event of another war, the repetition of its industrial mistakes of 1914-18 could be avoided, its material resources rallied to the Nation's support with the minimum of delay and the maximum of effectiveness, and postwar reconstruction facilitated.

2. Peace-time preparation of industrial mobilization plans. The chairman of the War Industries Board of 1918 had the following to say in his final report to the President:

"That much of the confusion experienced in collecting the supplies for this war could have been avoided by a more painstaking, thorough, and comprehensive effort on the part of the Government supply bureaus to work out a program of requirements, even a program tentative in many of its details, there is little doubt. That such a program would have been exceedingly difficult to frame is quite certain."

Experience in modern war has demonstrated that lack of adequate plans for industrial mobilization and for military procurement is the source of many evils in war, among which may be listed:

Delay in the procurement of necessary munitions, perhaps even to the point of jeopardizing national safety.

Lack of knowledge concerning the amounts of supplies needed, causing waste of resources in overproduction on the one hand and a shortage of essential items on the other.

Lack of knowledge concerning the most logical places for munition production, resulting in improper distribution of the load and causing congestion, difficulties in transportation, inefficient use of resources, and local and finally general upsets in the price structure.

Uncoordinated purchasing by many Government agencies of tremendous amounts of supplies, encouraging competition among these agencies, and inevitably resulting in further maladjustments in the price structure.

Inequitable distribution of war's economic burdens.

The foregoing suggests the thought that there should be established a large unit of specially qualified officers of the War and Navy Departments devoted in time of peace to studies of supply programs for hypothetical military undertakings. As these programs would always have to be based upon the obtainability of the supplies outlined, the two Departments should be required to go deeply into a study of the industrial resources and possibilities of the country as they relate to war needs.

3. Peace-time planning agencies.

The War and Navy Departments have the task, under the authority of Congress, of building up a defensive structure that will make hostile attack improbable. They have also the duty of making all preparation permitted under current congressional policy that will, in the event of attack, contribute to the defeat of the enemy and to the elimination of those preventable evils that have made their appearance in all past wars.

The National Defense Act specifically charges the Assistant Secretary of War with the supervision of the procurement of all military supplies and other business of the War Department pertaining thereto, and the assurance of adequate provision for the mobilization of material and industrial organizations essential to war-time needs.

Hence, the War Department planning activity deals with two related, yet fairly distinct, problems. The first comprises arrangements for purchasing Army munitions in emergency, a task that must be carried out in war by the War Department itself. (While there exists no law centralizing procurement planning responsibility within the Navy Department, yet that service has accomplished the same purpose through administrative action.) The second problem is to develop, in cooperation with the Navy and other interested agencies, organizational and functional plans to assist the President in controlling America's productive assets in war, a responsibility with which, after any emergency begins, the War and Navy Departments will have no direct connection.

The task imposed by this legislative directive is no simple one. The problem consists in making all the prearrangements necessary to insure effective use of material resources in war. The system evolved must incorporate the views of the Army, the Navy, and of industry, and must receive the approval of Congress and of the President. The ramifications of the prearranging process are almost endless. Constant study and research are demanded. Every progressive idea whose apparent worth stands the test of complete analysis must be given its place in a concrete and living plan that is in consonance with all other preparations.

4. Essential steps of a complete plan for industrial mobilization.

Mobilizing a nation for war is an involved and intricate process. Adequate provisions must be made to meet the necessities of the country's population. Over and above this accomplishment, peacetime armies and navies must be greatly expanded, equipped, and maintained in sufficient strength to accomplish the defeat of the hostile armies and navies. Armed forces must be left free to fight, and must not be burdened with any other national responsibility that would tend to divert their attention from this basic mission.

Mobilization and maintenance of armed forces result in a decrease in the number of citizens available for productive purposes at the same time that a great increase in the output of productive establishments is required in order to provide the necessary munitions in war. Two methods are available: First to increase the aggregate volume of output; second, to divert labor and raw materials from the production of nonessential items to the production of those things absolutely necessary to the successful conduct of the war. In a major conflict both methods must be used.

The United States is almost self-contained industrially. There exist within its borders in ample quantities the labor, power, facilities and, with certain important exceptions, all the raw materials necessary in war. Particularly is this statement true as applied to the total strength in man power. It is almost impossible to assume a situation where the population would be in danger of suffering actual hardships in war due to a lack of personnel to produce the necessities of life. In practice, therefore, it is customary to approach the mobilization problem from the standpoint of determining how many men are estimated to be necessary for the organization of military and naval units under a given situation, rather than how many could safely be so organized. Since the maximum force potentially capable of being supported greatly exceeds any that would conceivably be mobilized, this is a logical and certainly the most direct method that could be used. The size of the armed forces to be raised and the estimated rate at which they would consume munitions are derived from joint war plans drawn under the supervision of a joint war planning agency known as the Joint Board. The amount of material that must be produced in war over and above (or at least different from) that produced in peace comprises what is usually referred to as the "war load" on industry.

Hence the first important step in the preparation of a complete plan for industrial mobilization is the determination of material requirements by the Army and Navy separately in accordance with their respective war plans. These requirements are forwarded to the Army and Navy Munitions Board for coordination when necessary. This board consists of the Assistant Secretaries of War and Navy, and is assisted by a number of divisions and committees on which the Army and Navy are equally represented.

Requirements for any assumed situation having been determined, the next logical step is the development of specific plans by which these items may be promptly procured from industry. The determination of requirements and the development of these specific plans is known as procurement planning. Many considerations affect the development of such plans but above all the purpose must be to assure prompt initiation of production of the required items. (See part I.)

When the requirements of the armed forces and other war agencies have been determined, and the methods for the distribution of this load to industry have been blocked out, the third essential step of the industrial mobilization problem becomes evident, viz, to determine the probable effect of the war load on industry, and to develop measures that will assist industry in absorbing that load.

The essential elements of production are raw materials, labor, power, finances, facilities, and transportation. The problem is to assure the most efficient use of these things.

Under various assumed situations, the elements of production in which there promises to be a shortage must be estimated, just what effect the shortage will have and where it will occur, and the proper priorities for the use of those things in which a shortage will exist must be determined.

Having determined upon the proper uses for materials and services, the next problem is how to assure that they will be so used. Plans for this must be concrete, definite, and practical. There must be considered methods for utilizing efficiently the war powers of the President, the authority likely to be accorded by Congress, the war-time power of commandeering, and, above all, the force of public opinion. The support of public opinion is so essential that anything that may appeal to the majority of the people as unnecessary, unfair, or unjust cannot be permitted to creep into the plans. The economic burdens of war must be equitably distributed. This entails a proper control of prices, a problem that must be solved if profiteering is to be prevented. To do all these things in time of war will require a control and coordination of the Nation's economic resources. After there have been developed the methods to be employed to make effective the industrial controls that have been decided upon as necessary, the next step is to determine in what administrative bodies the authority for exercising them should be reposed, and how these bodies should be grouped together for efficient administrtion.

The organizational plan is intended to operate under leaders and conditions of the future and must necessarily be elastic in its provisions. It is necessary, however, to foresee its essential parts in order that responsibility may be definitely established and relationships with other important agencies understood. The planning agencies must also make necessary arrangements in peace to facilitate the organization and functioning of the control body upon the outbreak of war. To summarize: The following comprise the essentials of a complete plan for the mobilization of industry:

a. Procurement planning.

(1) Determination of requirements.

(2) Development of plans for the procurement of such requirements.

b. Plans for control of economic resources and mobilization of industry. (1) Determination of measures to be employed to insure the proper coordination and use of the Nation's resources. (2) Development of plans for the organization of administrative machinery that will execute these control measures. The execution of the plans under a above is a responsibility of the War and Navy Departments, while the execution of plans under b above is a responsibility of the President, acting through such agencies as he and the Congress may establish.