American+Homefront+_+Transition+to+a+Wartime+Economy

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American Homefront | Transition to a Wartime Economy Directions: Analyze the text and answer the questions that follow each section. American Economy in Wartime Fighting a global war troubled President Roosevelt, but not British prime minister Winston Churchill, who knew that victory depended on industry. He compared the American economy to a gigantic boiler: “Once the fire is lit under it there is no limit to the power it can generate.” Converting the Economy War production increased rapidly after the attack on Pearl Harbor, helped by existing government plans to build thousands of warplanes and a “Two-Ocean” navy. Roosevelt believed that government and business had to work together to prepare for war. He created the National Defense Advisory Committee and asked business leaders to serve on the committee. The president and his advisers believed that giving industry incentives to produce goods quickly was the best way to rapidly mobilize the economy. Normally, the government asked companies to bid on contracts to produce military equipment, a slow process. Instead, the government signed cost-plus contracts, agreeing to pay a company the cost to make a product plus a guaranteed percentage as profit. Under the cost-plus system, the more—and faster—a company produced, the more money it made. Although not cheap, the system got war materials produced quickly and in quantity. Cost-plus convinced many companies to convert to war production, and Congress authorized the Reconstruction Finance Corporation (RFC) to make loans to companies wanting to convert. 1. What goal was the U.S. Government trying to achieve using the cost-plus system? American Industry Gets the Job Done By the fall of 1941, much had already been done to prepare the economy for war, but it was still only partially mobilized. The attack on Pearl Harbor changed everything. By the summer of 1942, almost all major industries and some 200,000 companies had converted to war production. Together they made the nation’s wartime “miracle” possible. agreeing to pay a company the cost to make a product plus a guaranteed percentage as profit. the more—and faster—a company produced, the more money it made.

Tanks Replace Cars The automobile industry was uniquely suited to mass-producing military goods. Automobile plants began making trucks, jeeps, and tanks. Mass production was critical because the country that could move troops and supplies most quickly usually won the battle. Automobile factories produced riﬂes, helmets, artillery, and dozens of other pieces of military equipment along with vehicles. Henry Ford created an assembly line near Detroit for the enormous B-24 “Liberator” bomber. The factory went on to build more than 8,600 aircraft. Overall, the auto industry made nearly one-third of all wartime military equipment. Building Liberty Ships Ford’s remarkable achievement in aircraft production was more than matched by Henry Kaiser’s shipyards. German submarines were sinking American cargo ships at a terrifying rate. The United States had to find a way to build cargo ships as quickly as possible. Kaiser’s method emphasized speed and results. Instead of building an entire ship in one place from the keel up, parts were prefabricated and brought to the shipyard for assembly. Kaiser’s shipyards built many kinds of ships, but they were best known for basic cargo ships called Liberty ships. When the war began, it took 244 days to build the first Liberty ship. After Kaiser shipyards applied their mass-production techniques, average production time dropped to 41 days. Kaiser’s shipyards built 30 percent of all American ships constructed during the war. As war production grew, controversies between business leaders, government agencies, and the military increased. President Roosevelt created the War Production Board (WPB) to direct priorities and production goals. Later he set up the OǤce of War Mobilization to settle disputes among the diǣerent agencies. 2. The auto industry made nearly one-third of all wartime military equipment. (Provide three examples of how they and the shipping industries did this.) Tanks Replace Cars The automobile industry was uniquely suited to mass- producing military goods. Building Liberty Ships Ford’s remarkable achievement in aircraft production was more than matched by Henry Kaiser’s shipyards Kaiser’s shipyards built many kinds of ships, but they were best known for basic cargo ships called Liberty ships. When

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