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• Once the war in Europe had begun in 1939, there was a need for new factories to be built in the USA.
• Businesses were allowed to provide weapons and supplies to Britain.
• The supply of weapons increased even more after the 1941 Lend-Lease Act.
• The act then allowed the US government to provide an almost unrestricted supply of aid to its allies in Europe.

Big business and the war economy

To make this possible, President Franklin D Roosevelt set up the War Production Board in January 1941. This was run by the industrialist Henry J Kaiser, who had also run the Tennessee Valley Authority (TVA). The board supervised the production of $183 billion worth of weapons and supplies. It also had to ensure that industries could shift from civilian to wartime production. For example, it helped a tractor factory to convert to building tanks instead.

Big businesses were then brought in, to focus on certain war products. For example, the car manufacturing company General Motors was responsible for making millions of machine guns and employed an extra 750,000 people during the war. The Ford car factory in Indiana was producing more weapons than the entire country of Italy by 1944.

Influence of the war on industry

In May 1943, industries had some constraints put on them by the US government. The Office of War Mobilization was set up to control national prices and wages to prevent them both from becoming too high. Production of cars was stopped as factories began to produce war materials instead. Rationing of cloth meant that clothes had to be made from less material, which led to much simpler clothing styles. There was also some rationing of meat, petrol and sugar.

There were also longer lasting effects of the war on industry. In 1937, the defence industries were responsible for less than 1.5 per cent of the USA’s income. However, by 1945, this had risen to 50 per cent. There was also growth among new industries and businesses that had been stimulated by the war. One example is the pharmaceutical industry, which had been boosted by the production of penicillin to heal soldiers wounded in combat.

By the end of the war, the US had one of the most powerful economies in the world.

The war quickly ended the unemployment crisis caused by the Great Depression in the 1930s. This was because the demand for industrial products increased beyond anything US industry had ever needed to manufacture before. There were 8.1 million unemployed people in the USA in 1940 but only just over 1 million by 1945.

Employment

Around 16 million people served in the armed forces and around 14 million people worked in factories on the home front by the end of the war. This included almost 4 million workers, many of them African Americans, who migrated from the southern states to work in the factories in the north and the west of the country.

Additionally, around 7 million women were added to the workforce. Many of them were employed in engineering and electronics roles, which they had traditionally been excluded from before the war. There was also a large increase in the number of teenage boys in employment, from around 900,000 14- to 18-year-olds in 1940 to 3 million by 1944.

The scale of the USA’s economic output

President Roosevelt said throughout the war that he wanted the USA to become the “arsenal of democracy”. By this he meant that he wanted the country to make weapons for the Allies (Britain, the Soviet Union and later the USA itself) and also beat the armies of the Axis (Germany, Japan and Italy). By 1944, the USA was producing half of all of the weapons being used in the war. By 1945, the USA was responsible for half of all of the products being manufactured in the world.

During the war, the USA produced:

• millions of artillery weapons and machine guns
• hundreds of thousands of tanks and aircraft
• around 35,000 landing craft
• around 1,200 large ships
• around 1,000 medium-sized ships

This was vital to the Allies’ winning the war. Not only was the USA producing significantly more weapons than its enemies but it was also able to replace losses much quicker. This was because, unlike Germany and Japan, it did not have to worry about its factories being bombed.

At the end of the war, those US citizens who were earning a decent wage wanted to put rationing and war shortages behind them and often wanted to start spending their money. This resulted in booms in car sales and house building. By the end of the 1940s, the USA was making 57 per cent of the world’s steel and 80 per cent of the world’s cars.

Post-war military spending

As the Cold War with the Soviet Union emerged and developed throughout the late 1940s, military spending continued to increase. In 1948 the US government spent $11 billion on defence, but by the end of the 1950s this had increased to $50 billion per year. The mass development of new weapons, such as atomic bombs, was partly responsible for this huge increase.

California benefitted from an increase in spending on scientific and technological research at institutions such as Caltech - the California Institute of Technology. As a result, the state eventually gained the expertise to become the centre of the USA’s computer industry.