Bill Knudsen meets President Roosevelt in the Oval Office, May 30, 1940. © AP Photo/George R. Skadding

You cannot just order a Navy as you would a pound of coffee, or vegetables or meat, and say, we’ll have that for dinner. It takes time. It takes organization.

—Bernard Baruch

ON TUESDAY, MAY 28, Knudsen sat in his office in the General Motors Building. The Detroit Free Press headline blared, BELGIANS SURRENDER ON KING’S ORDER. Knudsen, however, was looking over long rows of automobile production numbers. The phone rang.

“Mr. Knudsen,” said a voice on the other end, “the president of the United States wants to talk to you—here he is.”

The resonant voice with its mid-Atlantic drawl, familiar from radio and newsreels, came on the line. “Knudsen? I want to see you in Washington. I want you to work on some production matters. When can you come down?”

Bill already had some idea what was coming. Bernard Baruch had called to give him a heads-up on what he had told Roosevelt. “I think you will be getting a phone call,” the elderly financier had said.¹

Knudsen told Roosevelt he could be in Washington the day after tomorrow. He had to see Alfred Sloan and the GM board in New York first, but they agreed that Knudsen would come to the White House at ten o’clock on Thursday, May 30. The president rang off.

Knudsen sensed that his life was never going to be quite the same again. He had heard the president on the radio on Sunday night, announcing to the country his plans for national defense—what the president termed “readiness.” Roosevelt explained how in the past seven years the government had spent almost $1.3 billion on new armaments for the Navy, Army, and Air Corps, including some 5,640 new planes and 1,700 antiaircraft guns. With the worsening international situation, Roosevelt said, there would be need for more—and the government could not do it alone. He told the American people that he was going to ask private industry to help, and intended to call on key men in American business “to help us in carrying out this program.”²

When Bill Knudsen told his wife and children he was going to be leaving General Motors to help the president with the defense effort, they were stunned. Why? they protested. America wasn’t in any war; why would he give up his life at home in order to move to Washington? Besides, they pointed out, Roosevelt was a Democrat and Knudsen a lifelong Republican. His twenty-year-old daughter, Martha, a coed at the University of Michigan, asked the final question. “Why are you leaving to work for this man now?”

Knudsen’s answer was simple and direct. “This country has been good to me, and I want to pay it back.”³

The Dane flew to New York that afternoon, where he had an acrimonious meeting with General Motors’ chairman and his mentor, Alfred Sloan. “War’s not coming anytime soon,” Sloan predicted. “Your duty is here with GM.”

Knudsen shrugged. “The president of the United States called me,” he said quietly, “and asked me to come.”

“They’ll make a monkey out of you down there,” Sloan predicted, who was no fan of Roosevelt or the New Deal. During the punishing United Auto Workers strike, he had had Labor Secretary Frances Perkins calling him up in the middle of the night screaming that he was a scoundrel and a skunk for not giving in to the union’s demands. “You don’t deserve to be counted among decent men,” she had ranted. “You’ll go to hell when you die.”⁴

More recently Sloan had watched another GM executive of his, John Pratt, get called to Washington for service on Roosevelt’s ill-fated War Resources Board. Pratt had done his level best to give advice on how to coordinate industry with military needs for war materiel. His reward was being vilified in the left-wing press as a corporate shill, while New Dealers attacked the entire WRB as a haven of fascistic “Wall Streeters and economic royalists.” Interior Secretary Harold Ickes denounced the idea of giving business a major role in organizing for war, calling it an affront to democracy itself.⁵ When Roosevelt rejected the WRB’s final report and dismissed the panel, Pratt wrote Sloan a long account of the ill-starred affair. Sloan sensed that all a businessman would get in New Deal Washington was a swift kick in the pants.

“What do they want you to do?” Sloan finally asked.

“I don’t know, exactly, what the president has in mind,” Knudsen admitted.

“And still you go?” Sloan asked, incredulous.

Knudsen said yes. There was a full minute of silence. Then a tight-lipped Sloan said, “Very well,” shook Knudsen’s extended hand, and did not look up as Knudsen walked out.⁶

William Knudsen was taken off the General Motors payroll that same day. His life in the automobile industry, where he had spent the past thirty years, was over.

Yet the fact remained he didn’t know what Roosevelt was expecting of him. When he arrived by train at Union Station on Wednesday, May 29, it began to dawn on him that Roosevelt didn’t know, either.

He reached the White House shortly before ten o’clock on the thirtieth. That day, across the ocean, French troops were joining the British in the evacuations from Dunkirk.

Knudsen was greeted by a tall, gaunt man with a twisted smile and pointed chin. It was Harry Hopkins, the president’s most trusted advisor. One of the original architects of the New Deal, Hopkins had just left his post as commerce secretary to help Roosevelt organize the defense effort. He and Roosevelt had drawn even closer and he was now living in the White House, down the hall from the presidential bedroom. When Hopkins became engaged to be married, FDR had her move in, too.⁷ Roosevelt trusted no man more, and no one in 1940 understood the urgency of the task ahead more than Hopkins.

Hopkins had been a pacifist during World War I. Now with France on the verge of collapse and Britain threatened, he was a pacifist no longer. “We cannot go on sitting here and saying that the war is so many miles away,” he had told the Herald Tribune a few days before. “We must get realistic…. Suppose this war lasts two or three years. What effect is that going to have on the economy of this country? This is not a matter of sitting down at the dinner table and talking about it,” he added. “I belong to the school that does not talk about things—you do something.”⁸

Do something. But what? That is what Hopkins and Roosevelt hoped Knudsen could tell them.

Hopkins shook Knudsen’s hand, then whispered, “The president has asked me to tell you that we can’t pay you anything, and he wants you to get a leave of absence from your company.”

“I don’t expect any paycheck,” Knudsen replied, “and the other matter has been taken care of.” Then he was ushered into the Oval Office.⁹

The president’s desk was littered with memoranda and statute books opened to pages describing and debating the president’s wartime executive powers. Roosevelt and Hopkins, who had been so decisive in intervening in the domestic economy with the New Deal, were still feeling out what powers they had to protect America from potential adversaries.

Franklin Roosevelt stuck out his hand with his famous grin, his trademark cigarette holder tilting up almost toward the ceiling. Knudsen smiled back, gave a bow as was his custom, and took the president’s hand. A photographer was there to capture the moment with the click of a shutter and the flash of a bulb. Roosevelt the genial, gracious host and the master of the New Deal, in a light gray suit; Knudsen the king of Detroit, in a more somber dark suit with a patterned tie, looking all-business. The most extraordinary alliance in modern American history was about to be forged.

Roosevelt thanked him for coming. Knudsen replied he was happy to be called. Happy to help.

Then the truth of what he was really facing hit Knudsen fifteen minutes later when he and the president were ushered into a conference room. Knudsen discovered he was not the only one on FDR’s list. There was the silver-haired Edward Stettinius Jr., son of the great J. P. Morgan partner, and president of U.S. Steel, along with Chester Davis of the Federal Reserve Board, and Leon Henderson from the Securities and Exchange Commission. There was a large sloppy man in a nondescript suit: Sidney Hillman, president of the Amalgamated Clothing Workers, along with Ralph Budd of the Chicago Burlington Railroad. Rounding off the group was Harriett Elliott, dean of women from the University of North Carolina, who was there as “advisor on consumer problems.”¹⁰ She was as confused as Knudsen about what they were supposed to do as members of the Council of National Defense Advisory Commission, as Roosevelt proudly dubbed them. He explained that they were to be a branch of the Office of Emergency Management, which he had set up to dispense any and all executive powers that the situation in Europe might demand. When they had all met, Knudsen looked around the room and finally asked:

“Who is boss?”

It was a manufacturing term, meaning, Who is the person who will be running the shift and accepting responsibility for getting the job done?

There was a burst of nervous laughter, which the president joined in. “I guess I am,” he replied.¹¹ Then everyone was ushered into the Cabinet Room, where Knudsen found himself shaking hands with Secretary of War Harry Hines Woodring and Navy Secretary Charles Edison, as well as Harold Ickes and Labor Secretary Perkins. Roosevelt explained in vague terms what Knudsen and the others would be doing to help with the defense effort. He also reassured his Cabinet that NDAC’s role would be purely advisory. Knudsen, Stettinius, and the rest were not there to replace or supersede normal channels of Cabinet authority. With that, the meeting was over.

Knudsen returned to his hotel that night convinced of two things. The first was that the NDAC had absolutely no legal status; neither the Cabinet nor the War Department nor the Department of the Navy was under obligation to heed their advice—nor was anyone else. No one had even been appointed as chairman. “There was quite a lot of confusion,” he wrote in a memorandum for himself. “In true New Deal style, [we have] no authority except what the President delegates piecemeal.”¹²

The second realization was that if the council was going to have any real impact on how America would prepare itself for war, then its influence would depend entirely on how it presented the problem of how to convert butter into guns—or more precisely, turn an economy geared around producing consumer goods and services into making more weapons and war materiel than anyone had ever imagined.

Despite a decade of depression and high unemployment, the U.S. economy was still the most productive in the world. Its steel mills had produced an impressive 28 million long tons of steel—although that was less than half of what it produced in 1929. Nonetheless, America still produced more steel, aluminum, oil, and cars than all the world’s great powers put together—almost three million cars in 1939 alone.¹³

Yet this industrial output was less than met the eye when it came to getting ready for war. Something would have to be done to raise dramatically that steel output, for instance, which would be the primary sinew of machines of war, as well as to increase the production of iron and coal. In 1939 the American steel industry was at its lowest capacity in twenty years.¹⁴ Likewise a year’s production of aluminum, the primary material for making modern warplanes, would have to rise to a minimum of 750 million pounds. The industry’s twin giants, Alcoa and Reynolds, were making less than a quarter of that amount.¹⁵

America’s merchant shipbuilding industry on both coasts was producing four ships a month, when it would need to launch hundreds.¹⁶ As for those automobile plants, switching to producing Army trucks and other military vehicles would not so be easy—even for leading truck manufacturers like GM, White, and Mack. Army trucks had dozens of specifications, from minimum speed and fuel standards to being able to drive where there were no roads, which would demand heavy retooling of auto plants.¹⁷ They would also be running on a supply of tire rubber, which would have to double at the very least, when its sources were thousands of miles away in South America and the East Indies.

Great Britain had been mobilizing its factories, plants, and shipyards for war since 1936; Germany, since 1935; and Japan, long before that. Together with the Soviet Union, they were outspending the United States on weaponry at a rate of ten to one—even with the president’s expanding defense budget.¹⁸ How could America ever catch up?

Yet Knudsen and his colleagues had no authority whatever to force the changeover or order anyone to make anything. They would have to go from business to business with hat in hand, as Knudsen later put it, to persuade them to prepare for a war two-thirds of the American people opposed—including many businessmen themselves. Everything the NDAC accomplished would depend on the force of ideas and personality. Increasingly, because of his reputation, his rhetorical skill, and his sheer physical bulk, that meant Big Bill Knudsen.

One of those in the room that afternoon who wondered if Knudsen was really the right man for the job was Henry Kaiser’s old friend Interior Secretary Harold Ickes. As the meeting went on, he found it “more and more depressing,” he confessed in his diary. Knudsen struck him as “hard and cold and dominating,” someone too impatient and too hands-on to work well in Washington. “I have heard that Knudsen even makes his own notes in handwriting.”¹⁹

Even worse, Knudsen came from the world of General Motors and mega-capitalist corporations like Ford and DuPont, which “have vast interests in all parts of the world, including munitions,” and including Nazi Germany. That led Ickes to wonder about Knudsen’s patriotism and “his desire unselfishly to serve his country.”²⁰ Above all, Ickes worried that Knudsen and his friends would use the rearmament program to get big business’s nose “under the Administration tent,” as Ickes put it, at the expense of labor (there was already talk about the need for unions to make sacrifices for the war effort, he noted) and the New Deal agenda.

It was a fear shared by many of the ardent liberals in town. The economist Waldo Frank, Vice President Henry Wallace, the First Lady, even the president’s chief advisor, Harry Hopkins, watched Knudsen with some misgiving. They were hoping war might offer a chance to complete the New Deal agenda—a super New Deal, in fact.²¹ Through the regimen of mobilization, the government could finally transform all sectors of American society—business and labor, rich and poor, managers and the unemployed—into a single vast cooperative enterprise. War would force American capitalism to work for the general welfare at last. Businessmen like Sloan, Ford, and Knudsen himself would have to realize “there is no real hope, either for them or for the country,” Ickes furiously wrote, “unless they are willing to be satisfied with much less than they have.”²²

In private, Harry Hopkins was even more apocalyptic. “Democracy must wage total war against totalitarian war,” he wrote in a secret memo for the president. “It must exceed the Nazi in fury, ruthlessness, and efficiency.”²³ How likely was it that a man who had directed one of America’s biggest profit-making corporations, and a Republican to boot, would share their collectivist philosophy and goals?

On the other hand, Knudsen did have his supporters. One was Bernard Baruch. He saw the former GM president as “a production genius” but sensed “the formalized rituals of government are not for him.”²⁴ Another was Jesse H. Jones, the former Texas cotton broker who headed the Reconstruction Finance Corporation.

His and Knudsen’s paths had crossed back in 1934 when the RFC had put Detroit’s failing banks back in business after companies like Ford and Packard had to send executives to New York with empty suitcases to carry back enough cash to pay their workers.²⁵ A Hoover appointee, Jones had been waging a one-man guerrilla campaign against the administration’s strident New Dealers since they took office. Jones had liked what he’d seen of Knudsen, and the more Jones got to know him, the more impressed he became.

“He seemed to carry in his head a picture of the whole manufacturing business in the United States,” Jones remembered later, plus the phone numbers of the corporate heads who ran them. With his encyclopedic knowledge of industries from steel and airplane engines to chemicals and furniture making, Knudsen could tell Jones at once which plants “would have to be greatly enlarged, which with only a little retooling were ready to go to work” for the war effort. Knudsen was a vital resource for what would be Jones’s primary job under mobilization: directing RFC loans to those businesses that were getting their factories ready for wartime use.²⁶

For his part, Knudsen found in Jones a kindred spirit: a man who knew how to get things done in Washington with a simple handshake, who understood what American business needed to get on board the war effort—above all, the assurance that wartime conversion wasn’t a prelude to a government takeover—and who had a keen sense of the bottom line.^*

When Knudsen got his first office in the Federal Reserve Building, someone asked him if there was anything special he needed. Yes, he said. “I want a direct telephone from my desk to Jesse Jones.”²⁷

Their partnership would be one of the most important in the war years. One out of every ten dollars spent on the war effort from 1940 to 1945 would flow through one or another of Jones’s agencies, especially his Defense Plant Corporation. He would expand airplane plants and—with the help of former Union Pacific president Bill Jeffers—create a massive American synthetic rubber industry almost from scratch.^† Abroad, his agents bribed South American officials to keep certain strategic materials such as tungsten out of German hands. Neither America’s wartime aircraft industry nor Kaiser’s wartime industrial empire would have been possible without the loans from Jones. Yet even Jones couldn’t help Knudsen with what would be his most daunting task: getting the Army, Navy, and Army Air Corps armed, clothed, and ready for modern battle.

During his first weeks in Washington, Knudsen learned that the American military itself had only vague ideas of how to do this. Knudsen was given a copy of their Industrial Mobilization Plan, which was first drawn up by War and Navy Department experts back in 1922 and which had gone through multiple revisions since. He was dismayed to discover it was only eighteen pages long. The IMP did make a good-faith effort to figure how the U.S. economy could produce enough steel and rubber for tanks and vehicles and aluminum for airplanes and cotton for uniforms—something they had failed to do before World War I. It also identified some 25,000 plants the Army believed could be converted to wartime use.²⁸ It had also launched a pilot program the year before called Educational Orders, to revive a moribund American munitions industry. The Army had given contracts to Goodyear to manufacture gas masks, R. Hoe and Company to develop recoil mechanisms for antiaircraft guns, and General Electric to make sixty-inch searchlights. General Motors had been enlisted to produce military trucks, and Winchester to make the Springfield Armory’s new M1 rifle.²⁹

Knudsen himself had signed the 1939 GM order. But the Educational Orders had been tiny, the applications largely theoretical. The Army and Navy simply did not have the staff to think through problems of this magnitude—or even conceive of war on a scale this big. Nor had they considered the impact mobilization might have on the larger economy. They seemed to assume a civilian economy didn’t even exist.³⁰

Drawing from their World War I experience, soldiers and sailors—and many New Dealers—assumed changing to a wartime economy was like throwing a switch. All one had to do was pick a date—the Army even had a term for it, Mobilization Day, or M-Day—and issue the orders. Miraculously, the next day men would be drafted and reserves called up, factories would start making rifles and machines, and trains would steam for ports and depots with their cargoes of men, tires, bullets, shells, and artillery pieces.³¹

Knudsen knew M-Day was a fantasy. It made no allowance for what Knudsen would call “lead time”: the time needed for a conversion effort. Based on his own experience at Ford in World War I, he calculated that would be about eighteen months.

Knudsen had been the old man’s trusted director of wartime production then. He could remember standing out in hip-deep water in the Rouge River, helping to lay out the pylons for docks where Henry Ford was going to build the Navy subchasers known as Eagle boats (the facility would later become part of the River Rouge plant). What he discovered producing the Eagle boat and the Liberty engine for Glenn Martin and other American aircraft makers was that the process of mass-producing war materiel was no different than mass-producing anything else. Once you broke it down to as many interchangeable parts as possible, and arranged for the parts to come together in a continuous assembly line, you could make as many of what was needed, as quickly as needed, and as fast as anyone demanded—all the while driving the cost down the more you produced.

Designing the mass-assembly process for wartime production had been easy. Knudsen had done it first with cylinders for the Liberty engines and then for the Eagle boat. Before the war was over, he had had seven production lines going at once, each handling seven boats at a time—something unheard of in American shipbuilding—and all using workers who had never built a ship in their lives. By the time of the Armistice, Knudsen was set to produce one 112-foot-long Eagle a day.³²

Together Knudsen and Ford made the Eagle subchaser famous. “As boats, Eagles were not so hot,” remembered one Navy man who piloted one. “But as evidence of Bill Knudsen’s production ability they were a magnificent achievement.”³³

The Eagle boats had been one bright spot in the otherwise dismal World War I mobilization picture. When President Woodrow Wilson had declared war in April 1917, the situation had quickly descended into chaos. The Army and Navy had no idea what they needed or how to get it, even as they handed out contracts right and left. In July Wilson appointed the War Industries Board to try to pull things back from the brink. Its first chairman, overwhelmed by the problems, suffered a nervous breakdown. Its second quit in frustration as the Army’s insistence on doing everything itself, from handling transportation (it took over the nation’s railroads when supplies weren’t arriving in time) to supervising industrial plant expansion, did more harm than good.

At last, in January 1918, Wilson appointed Bernard Baruch to restore some sort of order. But it was too late. American companies wound up producing tons of war materiel, but almost all of it arrived in France after the Armistice. British prime minister Lloyd George noted bitterly in his diaries, “It is one of the inexplicable paradoxes of history, that the greatest machine-producing nation on earth failed to turn out the mechanism of war after eighteen months of sweating and toiling and hustling.”³⁴

Knudsen decided his job was to make sure that never happened again.

On June 2 he sent a letter to President Roosevelt:

“Dear Mr. President,” it read, “I trust you will permit me to express my most sincere appreciation of the honor conferred on me by your recent appointment…. I will function for any period that may be necessary to demonstrate my fitness, entirely at my own expense and further, I will cheerfully accept for any additional period necessary the duties assigned to me, on the same basis.”

In closing, Knudsen penned down at the bottom:

“I am most happy and grateful that you have made it possible for me to show, in small measure, my gratitude to my country for the opportunity it has given me to acquire home, family, and happiness in abundant measure.”³⁵

Two days later the last British soldier waded out to boats along the shore and left Dunkirk, along with virtually every piece of heavy equipment the British army owned. Only a miracle could save France and Britain now.

The source of that miracle would have to be the United States.

As he headed back to Detroit for one last weekend with his family, Knudsen weighed the heavy obstacles ahead. He did, however, have certain advantages. For one thing, America was not yet at war. Unlike in World War I, there was still lead time for wartime conversion—if Britain and France could be kept in the fight. That would have to be one of the priorities of America’s conversion to wartime production: finding a way to keep the Allies in Europe from collapsing before America was ready to face Hitler on its own.

Knudsen also had faith in the power of mass production. He knew that in World War I large parts of American industry still had not switched over to the flexible-assembly-line methods that were now common in the automobile industry. Once they did, he reasoned, he could turn America’s engineers and managers and workers loose to do what they did best—making things for use, in this case for the United States Army.

Once he got back to Washington, however, he learned that discovering what the Army needed wasn’t so easy.

“What do you want?” That would be the first question Knudsen would ask whenever he met the generals in charge of Army procurement. Each time, the answer would be the same. We want an army of 400,000 men equipped and provisioned within three months of M-Day, they would say, and another 800,000 men after one year. Knudsen would then shake his head.

“That’s not what I need,” he would say. “I need to know what kind of equipment you need for these men—and how many … Please tell me how many pieces.”³⁶

And increasingly he learned none of them really knew the answer. He had lunch at Fort Myer with General Marshall, who told him his fears of fighting a war when everything from rifles (the Army was still using the ’03 Springfield model) and machine guns to telephone cable and medicine was in chronic short supply, and when trainees would have to train using wooden guns and fire on wooden boxes labeled tanks, and fire salvos of artillery from tree stumps labeled artillery.

“Our greatest need is time,” Marshall told him. Knudsen could see that, but he also needed to know exactly what equipment Marshall and the Army needed and how many, and no one could tell him. The situation in the Navy was much the same.³⁷ The truth began to dawn on Knudsen. He couldn’t get a straight answer because they were waiting for him to tell them what the American economy could produce, and how much. If the country was going to make itself seriously ready for war, neither the politicians nor the generals nor the admirals were willing to take the lead. American business and industry would have to figure it out on their own.

Others besides Harold Ickes had their doubts they could do it without a single person in charge. For them the lesson from the other side of the Atlantic was clear. America had to mobilize all its resources for war, and quickly. A comprehensive plan had to be devised, orders had to be given, and someone needed to take the helm: a Wizard of Oz figure, with his hands on all the production levers and whose stern commands carried the moral force of law.

“The nation clearly, almost violently wants a man of action,” thundered Time magazine the weekend after Dunkirk, “a powerhouse of strength and sureness.” It was worried that America was getting Bill Knudsen instead, “a ponderous, accented, self-made man, a production genius,” but evidently not Time editor Henry Luce’s first pick for a war production czar.³⁸

Still, Knudsen believed he and his colleagues could do it without becoming czars or wizards. “Industry in the United States does more for the country in direct, or indirect, contributions to the public wealth than in any other country on earth,” he had told an audience in Detroit three years earlier. “And it will continue to do so if given the opportunity without restrictions.”³⁹ Those restrictions had come in the thirties, with the Nye investigations that had essentially destroyed America’s munitions industry, and absurd new tax laws that made making armaments almost prohibitive.^‡ Even making as basic a compound as gunpowder, Knudsen was learning, America would have to start virtually from scratch.⁴⁰

The evening after his sobering talk with Marshall, Knudsen sat up all night in his hotel room with a yellow legal pad. He had discovered how primitive the thinking about procurement still was in Army circles, where everything was based on units of one: If one man needed so much cotton for making his uniform at such and such a cost, then two men needed twice as much, and so on.⁴¹ From uniforms to rifles and tanks and airplanes, Knudsen knew mass production would introduce economies of scale and reduce such thinking to nonsense. “The first thing to do,” Knudsen told himself, “was to get started on the weapons that required a long cycle in manufacturing.” Those would be ships, tanks, airplanes, guns, smokeless powder, and TNT. The second was begin planning for the shorter-cycle items like trucks and vehicles, clothing, food, and smaller arms like rifles and machine guns. The third step was to assemble a team who understood the dynamic power of mass production, but also the technical problems facing a modern economy.

By dawn he had his list. One name he didn’t bother to write down. That was his fellow NDAC member Edward Stettinius, chairman of U.S. Steel. Stettinius had been on the short-lived War Resources Board. With Stettinius and his deputy Donald Nelson, the former president of Sears Roebuck, in charge of NDAC’s Materials Division, Knudsen knew he had a strong ally on that flank.

The name at the head of his sheet of legal pad paper was that of young, vigorous John D. Biggers, president of Libby-Owens Glass. Knudsen had known him since his Ford days, when Libby-Owens made the glass for Model T windshields, and had worked with him on various charitable causes. Biggers was one of the most principled men Knudsen knew, and an FDR favorite.⁴² He decided to make Biggers his personal deputy, as well as head of procurement for trucks, tanks, and other large vehicles.

Then came Harold Vance, chairman of Studebaker, which had one of the smartest engineering divisions in the car business. Knudsen decided he would put Vance to work on machine tools, artillery, and artillery shells, while Earl Johnson, an alumnus of General Motors as well as of DuPont, would be in charge of explosives, small arms, and ammunition. At the end of World War I, America produced more gunpowder and TNT than Britain and France combined. In 1940 it produced almost none. Johnson’s skill in mobilizing this most basic side of war mobilization would earn him a nickname in the corridors of the War Department: “Powder Johnson.”⁴³

There was Bill Harrison, head of construction from American Telephone and Telegraph, whose president had been the first to push for a National Defense Advisory Commission.⁴⁴ Knudsen gave Harrison charge of finding communication and radio gear, as well as military construction; while Dr. George Mead, one of the most respected figures in American aviation, co-founder of Pratt and Whitney Aircraft and designer of the original Wasp engine, would deal with airplane production.

The last person on Knudsen’s list was a military man, not a business executive. He was Admiral Jerry Land, chairman of the United States Maritime Commission, a man with unparalleled knowledge of America’s shipyards, who would supervise what would become one of the biggest projects of the entire war: building up America’s merchant shipping fleet. In World War I, lack of an adequate merchant fleet had kept the growing supplies of equipment and munitions stuck on the wrong side of the Atlantic. Knudsen was not going to let that happen this time. Balancing the shipbuilding needs of the Navy and the civilian fleet would remain one of his highest priorities.

Six names, six men. Later there would be others. For now Knudsen would get Bigger, Harrison, and Vance leave of absence from their companies (the others were retired or, in Land’s case, already in Washington). He also landed them offices near his own in the Federal Reserve Building, the NDAC’s temporary home. They were the first of the so-called dollar-a-year men who would begin to descend on Washington from scores of other companies and business to take charge of the war production effort. As a group and as individuals, they would be scorned and vilified, dismissed as narrow-minded incompetents or, alternately, denounced as scheming greedy profiteers.

But as a team, Knudsen and his colleagues would guide the country into facing the greatest and most complex challenge in its history.

And thus far Henry Kaiser was not even a glimmer in anyone’s eye.

On June 12, a steamy Wednesday, the National Defense Advisory Commission held its first official meeting. Far away in Europe, Italy had declared war on France and Great Britain—a move Roosevelt denounced in a speech at the University of Virginia as a “stab in the back”—the most militant speech from the president on foreign policy so far. Meanwhile, a demoralized French government was groping toward an armistice with Hitler.

The big problem for the commission that day, however, was office space. William McReynolds, a wiry bespectacled thirty-four-year veteran of nearly every federal department in Washington before becoming FDR’s head of the Office of Emergency Management, and whom Roosevelt had loaned to Knudsen to help him get set up, proposed a solution. Everyone would move over to the new Social Security Building, which was nearly finished but had 200,000 square feet of empty offices.⁴⁵ In the meantime, the Federal Reserve Building would be their temporary home. It also had the advantage of being air-conditioned, unlike the War or Navy buildings—and during one of the most torrid summers in Washington memory.

Bill Knudsen’s immediate focus was on how a commission that was entirely advisory, with no powers of its own, was going to proceed.

“First,” he told everyone, “we have to find out what the Army and Navy want, how much, and when.” The estimate they had given him of arming and equipping an additional 280,000 men would be, he believed, totally inadequate to the job that was coming. “I suspect the Army and Navy can, and will, change their mind pretty fast…. So let’s not pay attention to that 280,000 figure.”^46§

He then explained to those who weren’t engineers how mass production worked. He showed how to take a complete unit like an airplane or a truck or a machine gun, break it down into little individual pieces, then machine the parts back together again so each was uniform and each subassembly functioned exactly like every other subassembly—and then every completed unit functioned exactly like all the rest. This, he said, would be the basic way in which everything necessary for defending the country would have to be made.

“Mass production has never depended on speed and never will,” he told his listeners. “Speed, as such, is worthless. The only thing that produces good work is accuracy.” Once factories and workers learned how to reproduce that accuracy with new unfamiliar products like tanks and planes, they could go on to make more complex weaponry at the same rate—perhaps weapons more complex than any ever seen.

“I’m not a soldier, and I’m not a sailor,” Knudsen concluded. “I am just a plain manufacturer. But I know if we get into war, the winning of it will be purely a question of material and production. If we know how to get out twice as much material as everyone else—know how to get it, how to get our hands on it, and use it—we are going to come out on top—and win.”⁴⁷

Knudsen was happy, as well, because in addition to his own team, two more allies had turned up. One was Roosevelt’s new secretary of the Navy, Frank Knox, a fellow Republican and Chicago newspaper publisher. The other, even more important, was Henry L. Stimson, the new secretary of war. At age seventy-two, Stimson was a Washington legend. Former secretary of war under President Taft and former secretary of state under Hoover, no man knew more about the ins and outs of American foreign policy—and, as a leading corporate lawyer, the moods and direction of American big business.

He and Knudsen soon discovered they were kindred spirits. “My impression of Mr. Knudsen’s ability and his tact grows with each time I see him,” Stimson would write in his diary.⁴⁸ He also agreed with Knudsen that the only way for America to prepare for war was through American private enterprise. “You have got to let business make money out of the process,” he would write in his diary, “or business won’t work.”⁴⁹

Stimson became secretary of war on June 14. That same day the papers carried the news that the Germans had marched into Paris.

Back in New York, Alfred Sloan sat in his office in the General Motors Building and penned a note to his friend John Pratt.

It looks as if the war in Europe is rapidly moving toward a conclusion. I am probably wrong about this but I can’t see how it can be otherwise. It seems clear that the Allies are outclassed in mechanical equipment…. They ought to have thought of that five years ago. There is no excuse … except for the unintelligent, in fact stupid, narrow-minded and selfish leadership which the democracies of the world are cursed with…. [Now] there is nothing for the democracies to do but fold up. And that is about what it looks as if they are going to do.⁵⁰

Bill Knudsen was out to prove his former boss wrong.

“No one can do what we can do if we all get together,” he liked to boast. Americans’ love of freedom, of individuality, of doing things differently from the other guy—these were sources of strength, he believed, not weakness. He believed in the power of the average American worker—“Progress in the world is accomplished by average people,” he would tell audiences—and the power of American business. “American ingenuity has never failed to cope with every specific problem before it,” he told a national radio audience, “and if we have your support and confidence, we will surely succeed.”⁵¹

On that count, some American businesses were already giving him a head start.

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* Jones was very proud that his Reconstruction Finance Corporation was the one New Deal agency that actually made the taxpayer money, instead of losing it like the others.

† Jeffers, Montana-born son of a brakeman who had grown up on the railroad he would eventually run, decided someone else could run the show when he brought synthetic rubber output from almost nothing in 1941 to 270,000 tons by 1943, and resigned. Roosevelt and Jones pleaded with him to stay. But Jeffers refused. He wrote to the president: “I feel I can contribute more to the war effort by getting back to that railroad.”

‡ His colleague Ed Stettinius could tell him how after World War I Bethlehem Steel had been forced to close down its plant for making large artillery pieces because the federal government demanded the company pay a special tax for the facilities. Bethlehem offered to give the government the plant, and its huge forging, boring, and casting machinery, for free. The government had refused. And so, at its own expense, Bethlehem had been forced to break up and tear down every fixture and sell it for scrap.

§ He was right. Just three weeks later, the Army would raise that figure to one million men by 1941, and two million by January 1, 1942.