In December 1940, a year before the Japanese attacked Pearl Harbor, President Franklin Roosevelt sat down for one of his famous radio “fire side chats” with the American people.
He told them, “We must be the great arsenal of democracy,” and he called upon the country as a whole to not only supply its allies with planes, tanks, guns and ships, but to also build up its own defenses. To assist in accomplishing that goal, he created the Office of Production Management (OPM), an action that would have far-reaching effects on the country’s farmers.
Office of Production Management
William S. Knudsen, former head of General Motors, was named director of the new OPM, which had charge of deciding priorities, awarding contracts and allocating critical materials. The efforts took two approaches: denying scarce goods to producers of non-essential items, and encouraging producers to convert to the manufacture of goods essential to the war effort. This was done by holding out the prospect of hefty profits under what was called the “cost-plus” formula.
In mid-1941, the OPM limited farm equipment production to 80 percent of new machines and 15 percent of repair parts built in 1940. Farmers, dealers and manufacturers protested long and loud, and the government relaxed the restrictions a little, allowing most farmers’ needs to be taken care of through mid-1942.
By the time of Pearl Harbor, Dec. 7, 1941, many farm equipment, automobile and other manufacturers were heavily involved in war production, although most still retained the bulk of their civilian manufacturing capacity. The farm implement and automobile publications of the day were filled with speculations about how much critical material would be allotted to the industries’ manufacturers for their regular product lines.
War Production Board
The demands associated with total war that came in the wake of Pearl Harbor called for strong measures to eliminate wasting essential plant capacity on nonessential goods and, in January 1942, Roosevelt formed a new War Production Board (WPB), appointing Donald M. Nelson to be its head. Nelson had been Sears, Roebuck & Co.’s executive vice-president of merchandising, and as war production “czar,” he wielded a level of authority over the nation’s economy that was second only to the president’s.
Nelson had the power to commandeer and reallocate critical materials, decide which products were nonessential and prohibit their manufacture, and to force plants to convert to war production and even to expand their facilities if he deemed it necessary.
An April 1943 Farm Implement News article states, “The greatest obstacle to the production of more (farm) equipment at this time is the inability of the manufacturers to obtain the raw materials required to fabricate the machinery.”
The Army, Navy and Maritime Commission were given priority; each of these agencies had a “AAA” priority rating, so their needs for steel – to build ships, tanks and guns – were met first.
Farm machinery, with an “AA-1” priority rating, usually followed because it was considered the most essential of civilian equipment. Such a relatively high priority didn’t necessarily mean a manufacturer would get the critical materials needed, though, for as ship builder Henry Kaiser once said, “A priority is something which gives you an option to ask for something which you know you’re not going to get anyhow.”
Farm machinery quotas shifted production
As a result of a 1942 WPB limitation order, quotas for new farm machinery that year were based on only 20 percent of each manufacturer’s total sales in either 1940 or 1941, whichever was higher.
Generally, quotas for smaller producers were higher than those for larger ones, and that forced virtually all production of farm machinery from large companies, such as Deere & Company and the International Harvester Company, to small and intermediate producers, such as Massey-Harris, Allis-Chalmers, Minneapolis-Moline and Oliver. The shift gave the smaller firms a leg up and freed the larger ones, who were better equipped, for heavy war production.
Brand loyalty went out the window as many farmers, to get one of the scarce machines, were forced to switch brands.
A year later, the WPB modified the quotas again, allowing production of 80 percent of pre-war sales. Because most of their production capacity was dedicated to war goods at the time, neither IHC nor Deere could meet these newest quotas.
On the other hand, the smaller companies had no trouble filling theirs because they were not heavily committed to making military goods; having manufacturing capacity to spare, the smaller firms wanted the quota system abolished.
WPB Farm Machinery and Equipment Division
In 1942, Charles Deere Wiman, president of Deere & Company, entered the Army as a colonel and was assigned to the staff of Gen. Levin H. Campbell, chief of ordnance. He worked in the tank and combat vehicle division until 1944, when he was reassigned to the WPB as director of the Farm Machinery and Equipment Division.
The smaller equipment manufacturers, along with machinery-starved farmers and the War Food Administration, called loudly for an end to quotas. Some thought Wiman, and his assistant, Harold Boyle of IHC, favored maintaining the quotas to give their two companies an advantage at war’s end, and this was probably true.
Wiman and Boyle probably didn’t see any sense in allowing the smaller companies to go into the post-war period with more market share than they claimed at the beginning of the war, especially taking into consideration IHC’s and Deere’s patriotic war work.
End to the quota system
Due to political pressure, though, the quota system finally was discontinued, and the smaller farm machinery companies did end up with some post-war advantage as a consequence. In mid-June 1944, Wiman came down with pneumonia and resigned from the WPB, getting himself out of a sticky situation.
All this history paves the way for next month’s column (“Beating Wartime Restrictions”), the story of how Henry Ford and Joe Tucker, of Massey-Harris, each came up with a highly imaginative plan to beat the wartime manufacturing restrictions and to assure themselves a huge chunk of post-war business. One plan succeeded and one failed. FC
Sam Moore became interested in agricultural machinery while growing up on a farm in western Pennsylvania. Now, he lives in Salem, Ohio, and collects antique tractors, implements and related items.