Office of Production Management - Defense Progress, November -December 1941

PRESIDENT'S SECRETARY'S FILE Subject File Office of Production Management: Defense Progress: Nov. -Dec. 1941 Box 147 The President 4 DEFENSE PROGRESS CONFIDENTIALI NUMBER 63 NOVEMBER 28, 1941 Office of Production Management BUREAU OF RESEARCH & STATISTICS STACY MAY, CHIEF DEFENSE PROGRESS Issued to Copy Number This report is loaned to you by the Bureau of Research and Statistics of the Office of Production Management for official use. It contains CONFIDENTIAL information affecting the defense of the United States. Revelation of its contents in any manner to unauthorized persons is prohibited by the Espionage Act. See inside of back page for Rules for Custody of Defense Progress DEFENSE PROGRESS BUREAU OF RESEARCH AND STATISTICS. STACY MAY, CHIEF ECONOMIC ANALYSIS BRANCH MORRIS A. COPELAND, CHIEF LESTER S. KELLOGG, ASSISTANT CHIEF & EDITOR This summary contains CONFIDENTIAL information affecting the defense of the United States. Revelation of Its contants in any manner to unauthorlood persons 10 prohibited by the Hopionage Act. CONFIDENTIAL I NUMBER 63 DEFENSE PROGRESS NOVEMBER28, 1941 BRIEFS OF CONTENTS Page THE TOTAL VALUE OF MUNITIONS DELIVERED AND DEFENSE CON- STRUCTION in the first 16 months of the defense program -from June 1940 to October 1941-amounted to $12 bil- lion. Of this total $7.5 billion represent munitions delivered and $4.5 billion defense construction. 1 AUTOMOBILE COMPANIES ARE CURRENTLY SCHEDULED TO MAKE LIMITED USE of their existing manufacturing facilities on defense production under present prime contracts. Sixty-two percent of the value of contracts awarded to or cleared for these companies through October 15 were scheduled to be produced in entirely new Government financed facilities. Equipment to be produced in exist- ing facilities will require little change-over from normal peace-time production. 4 RECENT CONTRACT PLACEMENTS suggest improved trend in delivery schedules for planes and parts. One-fourth of the items under contracts cleared by the Office of Pro- duction Management during the last half of October are scheduled to be delivered by October 1942, as compared with one-eighth to be delivered in the next year under September clearances. 6 TO CONTROL THE IMPACTS OF SHORTAGES MOST EFFECTIVELY, A PRIORITY SYSTEM must work up from the raw materials and not down from the finished products. Only in this way can it act as the "synchronizing force" of production. 7 SHIPMENT OF STRATEGIC AND CRITICAL MATERIALS TO THE UNITED STATES has been expedited since June 1941 by a system of shipping priorities which has already cleared up the accumulated stocks of several materials at their foreign sources. 12 DEFENSE PROGRESS SERIES. Monthly production of air- planes, combat vehicles, and army-type guns reached new highs in October but did not come up to production schedules. $7 billion in estimates for supplementary national defense appropriations are now before the House Appropriations Committee. I NOVEMBER 1941 CONFIDENTIAL I NUMBER 63 CONFIDENTIAL ... I THE FIRST 16 MONTHS OF DEFENSE OUTPUT T he total value of munitions de- billion. Hence, $5 billion, or some livered and defense construction 40 percent of total deliveries and work put in place during the construction work under the defense first 16 months of the defense pro- program have been added in the four gram, from June 1940 to October 1941, months from June to October 1941. amounted to $12 billion. This total Defense output in November--muni- is exclusive of pay, subsistence, tions delivered plus defense con- travel, agricultural products, stock- struction-is estimated at $1.5 bil- pile, and other nonmanufacturing lion, an annual rate of $18 billion, items. Of this $12 billion total, 67 percent higher than the June 1941 $7.5 billion, or 63 percent, repre- rate, and 250 percent higher than sents munitions deliveries, and 84.5 the January rate. billion, or 37 percent, represents defense construction. Of the $7.5 The growth of defense output billion in munitions delivered, air- has, however, been far outstripped planes accounted for $1.8 billion, by the growth of the funds provided ordnance for $1.3 billion, ships for by Congress, British Orders, and $1.9 billion, and other munitions for Government corporations to finance $2.5 billion. the production of defense output. This is shown in Chart 1. As of The tempo of defense output has October 1941 the $12 billion is a- been steadily accelerating. At the bout one-fifth of the total funds end of the first 12 months of the provided by that date. This per- defense program-June 1941--the centuge does not measure the degree total value of defense output was $7 of fulfillment of the program CHART I - PROGRAM AND VALUE OF MUNITIONS DELIVERED AND DEFENSE CONSTRUCTION IN PLACE BILLION DOLLARS CUMULATED BILLION DOLLARS 60 60 50 50 Program 40 40 30 30 20 20 10 10 Volue of Munitions Delivered & Construction in Place 0 0 June July Aug Sept. Oct. Nov Dec. Jan. Feb Mor. Apr. May Jun. Jul. Aug. Sept. Oct. Nov. 1940 1941 NOVEMBER 28, 1941 CONFIDENTIAL ... I NUMBER 63 CONFIDENTIAL 2 started in June 1940 for the program showing a rapid rate of acceleration, has grown since then and undoubtedly has' barely dented the surface of will continue to grow. It shows requirements. rather, that the increase in the The monthly rate of defense rate of defense output has not been output climbed very sharply during able to keep pace with the increase the last months of 1940, rising from in requirements. Thus in July 1940 about $260 million a month in July funds amounting to $11 billion were and August to about $700 million in available for the items covered un- December. This is shown in Chart 2. der munitions deliveries and defense Since January when the level of out- construction. During the first six put was the same as in December, the months of the program, approximately rate of defense output has risen 82 billion of defense output were fairly steadily up to May when it made available, while the program tended to level off until July. had increased by $10 billion to a Since then the rate of output has a- total of over $21 billion. During gain turned up rather sharply as the next six months delivered pro- production problems were ironed out duction and construction equalled $5 and new facilities provided under billion while the financed program the program came into operation. The increased by $16 billion to & total monthly rate rose to $1 billion in of $37 billion. The next four months July 1941, was $1.3 billion in Octo- yielded production of over $5 bil- ber, and is estimated at $1.5 bil- lion and the program increased an lion for November. What is even additional $20 billion. In terms of more significant is that the value present requirements the defense in place of defense construction has output of the first 16 months, while risen slowly in the last few months CHART 2 - VALUE OF MUNITIONS DELIVERED AND DEFENSE CONSTRUCTION IN PLACE MILLION DOLLARS MONTHLY MILLION DOLLARS 1400 1400 1200 1200 1000 1000 800 600 Total 600 600 Munitions 400 400 Construction 200 200 o o June July Aug Sept. Oct. Nov Dec Jon. Feb. Mar Apr. May June July Aug. Sept. Oct 1940 1941 NOVEMBER 28, 1941 CONFIDENTIAL 2 NUMBER 63 CONFIDENTIAL ... 3 from 8475 million in August to 8500 CHART 3- CASH DISBURSEMENTS million in October, while the value FOR MUNITIONS & CONSTRUCTION & of munitions delivered has risen VALUE OF MUNITIONS DELIVERED sharply from 8670 million in August & CONSTRUCTION IN PLACE to 8855 million in October. The de- CUMULATED fense program is moving from a peri- BILLION BILLION od of preparation to a period when DOLLARS DOLLARS it will reap the fruits of this pre- 12 12 paration. TOTAL 10 10 Cash disbursements, in Chart 3, are shown with the corresponding 8 8 estimates of total defense output, munitions deliveries, and defense 6 6 construction. Cash disbursements for Volue any month may include some prepay- 4 4 ments and some payments on current Disbursements deliveries as well 65 payments for 2 2 deliveries in previous periods. Hence, they may differ from current o 0 defense output. 8 8 MUNITIONS At present, total cash disburse- 6 6 ments are slightly less than total Disbursements value of munitions delivered and de- 4 fense construction in place. The 4 Volue of value of construction in place is a- Deliveries bout $1 billion more than cash dis- 2 2 bursements for construction while the value of munitions delivered is o o about & billion dollars less than 6 6 cash disbursements to date. Cash DEFENSE CONSTRUCTION disbursements for construction have 4 4 been consistently less than value in Value in Place place while they have been con- 2 2 sistently more than value of muni- Disbursements tions delivered. o o J J A S o N D J F M A M J J A S o N 1940 1941 NOTE: Defense Progress Series pre- sent for the first time, under muni- tions and construction, the value of deliveries or value in place. These values will be computed currently and will be presented in the series. NOVEMBER 28, 1941 CONFIDENTIAL ... 3 NUMBER 63 CONFIDENTIAL 4 LIMITED CONVERSION OF AUTOMOBILE INDUSTRY FACILITIES FOR DEFENSE PRODUCTION T hirteen major United States CHART VALUE OF MAJOR MUNITIONS TO automobile manufacturers will BE PRODUCED IN NEW AND CONVERTED make little use of their exist- AUTOMOBILE COMPANY FACILITIES ing manufacturing facilities in pro- ducing defense equipment under pres- MILLION COLLARS MILLION DOLLARS ent prime contracts. The bulk of de- 600 600 CONVERTED FACILITIES fense equipment under contract for 400 400 production in existing facilities will require little change-over from 200 200 normal peace-time production since it consists largely of automotive o o m equipment. ou 200 200 Of $1.9 billion of defense con- on 400 tracts awarded to, or cleared for 13 NEW FACILITIES 400 automobile companies through October 600 600 15, 1941: 800 800 $1.2 billion, or 62 percent, Enginee Comber s the AIRCRAFT Other Vehicles was scheduled to be produced in new facilities Toma, Gums, Shalls, Other Ordnance, and Morina Engines. , Exclutes Terms The remainder, $721 million or CHART VALUE OF OTHER MUNITIONS TO 38 percent, was scheduled for BE PRODUCED IN NEW AND CONVERTED production in existing facili- AUTOMOBILE COMPANY FACILITIES ties which are to be converted MILLION DOLLARS MILLION DOLLARS to defense production. 60 2 CONVERTED FACILITIES 40 40 This $721 million of contracts is exclusive of subcontracts and of 20 20 prime contracts placed with parts o o manufacturers. However, it may be 20 a compared with the automobile compa- 20 nies' $3 billion output during the 40 40 single calendar year 1940, second an 60 60 highest production record in history. NEW FACILITIES 80 2 Charts 1 and 2 show the distri- 100 100 bution of contracts according to 120 production scheduled for existing or 120 Tanka - Shall Other Name new facilities. The value of each Ordenne Enginee of the major groups of defense items . been, Prinan, Projection Anti-Airproft Directors already under contract to be pro- duced by these automobile companies horizontal line indicate the propor- is represented by separate bars. tions of the contracts to be pro- Parts of these bars lying below the duced in completely new facilities. NOVEMBER 28, 1941 CONFIDENTIAL ... 4 NUMBER 63 CONFIDENTIAL B Practically all of the 8914 The small extent to which the million worth of airplane equipment automobile industry has been conver- is to be produced in new plants. ted to defense production is further Less than 40 percent of the $288 indicated by estimates that in July million worth of tanks and other 1941, only eight percent of regular ordnance contracts are being pro- wage earners were employed in de- duced in existing equipment. The fense production. In December 1941 chief use of existing equipment ac- the proportion is expected to rise cording to these figures is to pro- to 11 percent. By July 1942 it is duce 8575 million worth of all com- estimated that 75 percent of auto- bat vehicles including scout cars, mobile company workers will still be personnel carriers, and other auto- outside the defense program. motive equipment except tanks. NOTE ON DATA: These data were ob- tained by an analysis of Government financed facilities contracts in- All of the new plants to be volving these automobile companies operated by automobile companies for and of certificates of necessity re- producing $1.2 billion of defense quested by these companies in con- products, are being financed by the nection with privately financed Government. Contracts for $102 mil- plant modifications. All but $189 lion will be filled in plants modi- million of the supply contracts with fied at Government expense; and $430 these companies are covered by this million will be filled in plants analysis. It was assumed that this modified through private financing $189 million of contracts involved under certificates of necessity. converted facilities. NOVEMBER 28, 1941 CONFIDENTIAL ... 5 NUMBER 63 CONFIDENTIAL ... 6 ESTIMATED DELIVERY SCHEDULES UNDER CONTRACTS CLEARED BY THE OFFICE OF PRODUCTION MANAGEMENT T he proportion of the $1,660.7 which require & long production pe- million of contracts for air- riod are included in the clearances planes and parts cleared by the for the second half of October. Office of Production Management in September and October which 18 For ordnance contracts there scheduled to be delivered within the has been & slight decline-from 52 next 12 months is higher for the percent to 44 percent-in the pro- contracts cleared during the last portion to be delivered within one half of October than for those year as between clearances during cleared in September and the first October 1 to 15 and those during Oc- half of October. More than one- tober 16 to 31. The proportion to fourth of the $448.4 million of con- tracts cleared between October 16 Chart 2 - DELIVERIES OF ORDNANCE and 31 are scheduled for delivery by (Figures in million dollars) October 1, 1942 according to pre- Per Cent to be Delivered se 297 liminary delivery schedules under 100 100 After these contracts. About one-eighth Oct. 1, 1943 of the $559.1 million of contracts By Oct.1, 1943 cleared during September are sched- By Oct. 1,1942 30 uled for delivery by October 1, 132 1942. The proportion of the total value to be delivered within two years has also been higher for the o o more recent clearance periods. How- Oct.1-15 Det. 16-31 ever, no contracts for heavy bombers Clearance Periods be delivered by October 1, 1943 Chart DELIVERIES OF AIRPLANES shows an increase from 84 to 98 per- (Figures in million dollars) Per Cent to be cent. Delivered 559 653 448 100 100 After 409 On the whole, these data sug- Oct. ", 1943 532 415 gest an improving record in contract By Oct. I, 1943 placement. However, there is danger in generalising from such scanty in- formation. It is proposed to follow 142 the time distribution of new con- By Oct. 1, 1942 76. E tracts currently in order to see o o whether the improvement continues as Sept. Dell-6 Oct.16-31 & consistent trend. Clearance Periods NOVEMBER 28, 1941 CONFIDENTIAL ... 6 NUMBER 63 CONFIDENTIAL 7 SUPPLIES, PRIORITIES AND ALLOCATIONS TO CONTROL THE INPACTS OF SHORTAGES NOST EFFECTIVELY, A PRIORITY SYSTEM must work up from the raw materials and not down from the finished products. Only in this way can it act as the 'synchronizing force' of production. T be Supply Priorities and Allo- trol from finished products down- cation Board on November 7 an- ward and from raw materials upward. nounced a. policy calling for the It is now moving more and more to- allocation of all critical materials ward greater reliance upon control throughout American industries. In from the raw materials upward, as an accordance with this policy, the improved classification of the rela- Office of Production Management is tive importance and time schedulesof to obtain detailed production pro- end-products, both military and civ- gram, industry by industry, for 1942. ilian, is devised. The "Finished Product Downward" This new policy emphasizes the System. As shortages in raw mate- principle that in order to control rials develop, a "finished product the impacts of shortages of raw ma- down" preference system encounters terials most effectively, a priority several major problems: system must work up from the raw ma- terials and not down from the fin- (1) It is difficult to deter- ished products. Only in this way mine the total of outstanding claims can it act as the "synchronizing for raw materials which are involved force" of production. Under either in certificates issued to holders of system, however, from "bottom-up" or preference ratings. from "top-down," there must be a classification of end-products ac- So long as there were no raw cording to their time preferences mater'al shortages of great magni- and a master time schedule showing tude there was no urgent need to in detail for each stage in the pro- know the total quantity of raw mate- duction process the quantitative re- rials which were "mortgaged" by end- quirements of raw materials for all product preference ratings issued. end-products. When the supply threatened to be The present system of priori- definitely less than current re- ties started some 16 months ago as quirements, however, fuller informa- one working only from the finished tion became urgent. Except where & product down and without adequate system of allocation-control from classification or statistical con- the "bottom-up" is in effect, how- trol. As long as defense orders did ever, it is a formidable administra- not seriously cut into the available tive and statistical task to deter- supplies of raw materials, this mine this. system was able to operate. As shortages began to develop, control The number of preference rat- was also begun in part in certain ings which must be granted, reported, cases from the raw materials up- recorded, and tabulated in order to ward. di At present then, the pri- provide such information is great. ority system is a mixture of con- So far in the present program over a NOVEMBER 28, 1941 CONFIDENTIAL 7 NUMBER 63 CONFIDENTIAL ... 8 million preference rating certifi- fense Supplies Rating Plan b and the cates and purchase orders have been P-orders lo had this purpose. In issued, as shown in Chart 1. This fact P-orders were introduced with number has surpassed all forecasts. great expectations for reducing pa- The resulting bookkeeping has ex- per-work but the volume of prefer- ceeded estimates and upset the tabu- ence rating certificates has contin- lating time schedule. The resulting ued to swell. time lag has made it diffiqult for these tabulations to be used for ad- (2) It is difficult to schedule ministrative decisions and impossi- monthly deliveries of raw materials ble for them to be used as a statis- BO that they do not"bunch up," inter- tical basis for adequate advance fere with each other, and do not ex- planning. ceed scheduled monthly requirements for the production of end-products. CHART 1. PREFERENCE RATING So long as the shortages were CERTIFICATES ISSUED of minor dimensions, the chief prob- lem was to make certain that defense CUMULATIVE TO OCTOBER, 1941 deliveries would be made 8.8 sched- THOUSAND THOUSAND 1200 1200 uled. In such a case, a system of preference ratings from end-products downward was sufficient to insure the priority of defense over nonde- 1000 1000 fense orders. Under such conditions there could be two parts of the sup- ply--"priority supply" and "free 800 800 supply." The "free supply" could then be disposed of at the will of the supplier. The volume of prefer- 600 600 ence ratings was moderate and no great control over them was essen- tial. 400 400 But the number of defense con- tracts has grown and sizable short- ages of raw materials have developed 200 200 so that all defense and nondefense New to Des requirements cannot be simultane- ously met. When such & situation o o develops, defense and essential non- J F M A M a J A 5 o defense requirements must be met "Extimated Does not include approximately 400 thousand purchase orders issued between July I and October 31,1941 first and only if there is a remain- ing supply is it available for allo- cation to uses without preference The great amount of bookkeeping ratings. As the scarcity grows, it involved in the present system was recognized fairly early. Succes- becomes necessary to reserve the sively, the revisions in the system whole supply of these raw materials have been planned with the hope of for military and essential civilian reducing the paper-work. Blanket purposes. Ratings and Project Orders were in- troduced with this in mind; the De- In any event a "top-down" sys- NOVEMBER 28, 1941 CONFIDENTIAL ... 8 NUMBER 63 CONFIDENTIAL ... 9 tem, control from the end-products a complete accounting for all sup- down, does not lend itself to car- plies and deliveries by each con- rying through a. production plan tractor would be necessary. calling for specified amounts of When control proceeds from the various end-products by specified raw material upward, a statement of dates. uses during the preceding period and The issuance of ratings begin- of expected uses may be required be- ning with the end-product and work- fore the granting of an allotment. ing down makes it difficult to pre- Enforcement is easier because need vent fabricators and contractors must be established, before public holding high preference ratings from officers, in order to obtain an al- "bunching" their orders for parts lotment. and raw materials well in advance of The Trend toward Allocation. their actual production requirements. The increasing pressure upon the a- Where there are serious shortages of vailable supplies of scarce raw na- raw materials, such & "priority terials led early in 1941 to the be- scramble" for raw materials is like- ginnings of an allocation procedure ly to develop, especially since moving in the direction of "bottom- price control is not an integral up" control. This started with a part of the priority system. Indeed semi-allocation or "controlled pri- the system rewards those who get ority system" for some of the raw there first with the highest ratings materials, such as alumimum, magne- irrespective of actual production sium, and nickel, which were the schedule requirements. first to bear the brunt of the sharp- ly increased demand caused by the (3) It is difficult to police defense program and where the prob- the priority system to see that pur- lem of accounting for total supply chases are made in accordance with was not as difficult as in the case actual needs and that deliveries of of other materials. Since then the end-products are made according to number of raw materials subject to specifications and schedules. "this allocation procedure has in- creased. Under a system that proceeds from the end-product downward, each The allocation of raw materials contractor must supply his various cannot, of course, eliminate short- customers on the basis of the pref- ages but if carried to a logical erence rating certificates which conclusion it can tend to minimize they hold. Even with an elaborate the "priority rating scramble," make scheme of field check-up, it is dif- price controls easier to establish ficult to be sure that in all cases and administer, and provide for an every contractor has supplied cus- orderly withdrawal of raw materials tomers according to the preference and consequently aid the smooth ratings which they hold, to say functioning of the defense program. nothing of the time schedules, if It also enables the manufacturer who any, of those ratings. Many kinds has had his raw material supply our- of violations of the priority system tailed to plan in advance rather have been reported and in various than to wait until the end of any ways conscious as well as unwitting period to determine whether he will deviations from the priorities sys- get any materials. tem may continue to creep in. To safeguard against willful deviations, The effectiveness of current NOVEMBER 28, 1941 CONFIDENTIAL ... 9 NUMBER 63 CONFIDENTIAL ... IO allocation procedures in providing The allocation procedure for for a more orderly and effective nickel was started in April 1941 flow of raw materials is illustrated upon the request of the Internation- by the cases oz nickel and of copper. al Nickel Company which was harassed For both these metals the monthly by the congested state of its order requirements based upon orders for books and by the clamor of fabrica- products with A and B ratings for tors for deliveries. the past few months have consistent- ly exceeded the available new sup- In the case of copper, delay in plies. The gap between priority re- instituting the allocation procedure quirements and supplies of nickel led to much confusion among fabri- has been steadily decreased in re- cators. An allocation procedure was cent months, as shown in Chart 2. begun in August when the increasing Although fabricators continue to gap between requirements and sup- face substantial shortages of this plies was assuming major dimensions. commodity, allocation has made prog- As Chart 3 shows, the gap between ress in clearing up the earlier con- requirements accepted for fulfill- fusion over how much nickel a fabri- ment and supply is still widening in cator could actually count on re- ceiving and has made possible more CHART 3 - REPORTED satisfactory planning of production. REQUIREMENTS FOR COPPER AS PERCENTAGE OF NEW PRIMARY SUPPLY CHART 2 - REPORTED PER CENT PER CENT REQUIREMENTS FOR NICKEL 200 200 AS PERCENTAGE OF NEW PRIMARY SUPPLY PER CENT PER CENT 180 180 160 160 SUPPLY 160 160 140 140 SUPPLY 140 MO IZO 120 120 120 100 100 100 100 80 so 80 so 60 60 60 60 40 40 40 40 20 20 20 20 o 0 Apr. May June July Aug. Sept. Oct Nov. 1941 o o Extimated July Avg. Sept. 1941 NOVEMBER 28, 1941 CONFIDENTIAL ... 10 NUMBER 63 CONFIDENTIAL = October. The gap must be reduced to cation and master production plan, improve the orderly flow of this raw there can be no satisfactory assur- material. ance of the smooth flow of scarce Although present allocation raw materials into the production of procedures have improved the situa- defense materials. tion for fabricators they do not For an outline of the evolution of offer any assurance that the allot- the present system, see Defense ments are so made as to assure the Progress, Issue Number 50, Part A. most effective use of all scarce na- Annual Review, pp. 91-102. terials. The current procedures have el been developed by individual materi- This plan involves & procedure als divisions with very little cor- whereby a firm can establish the relation between them. Master plans proportion of its business devoted and time schedules of productive re- directly or indirectly to national quirements are not available so that defense work. If the proportion of it is not yet possible for the allo- defense work established is sub- cation of one commodity to be meshed stantial a certificate is granted with that of another. Yet several carrying an A-10 rating to apply commodities frequently impinge upon to the defense proportion of the one another in the fabrication of producer's purchase orders. an end-product either because both are needed in its manufacture or be- of P-orders are issued only to indus- cause one can be used as a substi- tries in which the firms are en- tute for the other. Only by allo- gaged principally in defense work cating in accordance with such a and which are having trouble in ob- master schedule can it be assured taining certain well defined mate- that fabricators will not be held up rials. P-orders are permissive in by "plenty of steel; no copper." Un- character in that they make avail- til the principle of control from able to firms in a. particular in- the "bottom-up" throughout the field dustry under fulfillment of cer- of scarce raw materials is adopted tain conditions, & blanket rating and administered in accordance with applied to a specified list of na- an end-product preference classifi- terials for defense contracts. NOVEMBER 28, 1941 CONFIDENTIAL = NUMBER 63 CONFIDENTIAL 12 IMPORT SHIPPING PRIORITIES SHIPMENT OF STRATEGIC AND CRITICAL MATERIALS TO THE UNITED STATES has been expedited since June 1941 by a system of shipping priorities which has already cleared up the accumulated stocks of several materials at their foreign sources. s nipment of strategic and criti- essential materials for the fiscal cal materials to the United year 1942. It rates the materials States has been expedited since and determines the tonnage required June 1941 by a new system of ship- for shipping them. Transportation ping priorities. This system has is arranged by the Maritime Commis- already cleared up accumulated sion which has developed several stocks of several materials at their methods of expediting these ship- foreign sources. An informal ship- ments. It sends agents to the ping priorities arrangement which sources of defense materials to make prevailed before June did not prove detailed arrangements for prompt entirely satisfactory and led to the servicing. Under the Ship Warrants passage of the Ship Warrants Act Act, it can require American or for- under which the present system was eign vessels engaged in United set up. States import trade to call at ports outside their regular runs to pick Under this act, American and up defense materials, even at the foreign vessels bringing defense ma- loss of other cargoes which would terials to the United States are bring greater revenue. In order to given preferences in port facilities, prevent congestion in docking, the stevedoring, towing, overhauling, Commission may also divert ships and the procurement of fuel. In or- from. one port to another. der to receive warrants for these preferences the operators of the Import preference ratings are vessels must agree to follow ap- based upon both the economic and po- proved routes, carry vital cargoes, litical importance of the materials, and charge reasonable rates. The and need not necessarily follow the ships themselves are given different order of preference established in classes of warrants which make the the domestic distribution of materi- preference in shore facilities a- als for defense products. Strategic vailable in ascending order of the or critical materials urgently need- warrants assigned. ed for defense purposes may. not carry the same priority rating at The Stockpile Shipping Imports all sources. For example, mangan- Branch of the Office of Production ese ore, a comparatively large ton- Management, with the aid of an in- nage item, has three different ship- terdepartmental committee, has es- ping priority ratings, A-1, A, and timated the minimum import require- B, depending upon the source and ments of strategic, critical, and, quality of manganese involved.. NOVEMBER 28, 1941 CONFIDENTIAL ... 12 NUMBER 63 CONFIDENTIAL ... 13 These shipping priorities are peri- About 85 percent of the ton- odically reviewed by the Interde- nage in class A-1 priority ratings partmental Shipping Priorities Ad- is made up of four outstanding de- visory Committee and materials may fense materials, molasses (for ethyl be shifted from one classification alcohol), rubber, chromite, and cop- to another. per. As of October 31, 1941, A-1 or Three materials, iron ore, A. ratings had been assigned to car- bauxite, and manganese, constitute goes accounting for almost half the about 80 percent of the tonnage total import requirements for fiscal given A priorities. These materials 1942, according to the accompanying are highly essential and would no chart. B ratings, which account for doubt take the highest priority if 37 percent of the requirements, made they did not originate in the West- up the largest single group. ern Hemisphere. The first two rat- ings, A-1 and A, include the large tonnage items of strategic and crit- ical materials. DISTRIBUTION OF U.S. IMPORT Class B priorities include sug- REQUIREMENTS F.Y. 1942 ar, bananas, and coffee, large ton- BY SHIPPING PRIORITY RATING nage items which constitute more PER CENT OF TOTAL IMPORT REQUIREMENTS than half the total quantity in this 40 40 category. They are important items for civilian consumption originating largely within the zone of United States Naval control. 30 30 The materials in categories C and below are in general largely for civilian use but less urgently need- ed than the bulk of the materials 20 20 given a B rating. The improved shipping priorities system may be tested shortly by the task of handling the volume of im- 10 10 ports required for the balance of fiscal 1942 under the recently re- vised and expanded stockpile program. A change in the Far Eastern politi- cal situation might also affect o o shipping conditions and offset re- A-1 A B C D-E cent improvements. NOVEMBER 28, 1941 CONFIDENTIAL ... i3 NUMBER 63 CONFIDENTIAL DEFENSE PROGRESS SERIES Airplanes As can be seen in Chart 2, the index of total cumulated production The weighted index A of monthly stood at 36 at the end of October, production of military airplanes while the index of production re- reached a new high of 68 in October; quirements was almost six times as this represented & seven point in- high at 208. Practically all of crease over the previous high of 61 these requirements have already been in September but was 12 points below ordered. the production index of 80 planned under OPM schedule 8F. The output Army-Type Guns of trainers showed the greatest in- crease over September and ran well Marked increases in the October ahead of schedule. The production output of infantry-supporting arms of 4-engine bombers and 2-engine and field artillery weapons raised flying boats increased in October to the index of monthly production of meet schedules. Production of 1- Army-type guns 17 points over the engine pursuit planes, 1-engine September index to a new high of 84. bombers, and, transport planes in- However, this was but 75 percent of creased over September, but did not the monthly output scheduled on Au- meet schedules. There was a de- gust 1, 1941, due largely to a lag cline in the production of 2-engine in the production of antiaircraft land based bombers, 2-engine pursuit guns. planes, and observation planes dur- ing the month. As shown in Chart 3, the index of total cumulated production stood The index of total accumulated at 44, compared with financed pro- production stood at 46 at the end of duction requirements of 265; 95 per- October. This compares with the in- cent of these requirements had been dex of financed production require- ordered at the end of October. ments of 311 and orders of 265. Chart 1 indicates the rate at which total output has increased since the start of the program and the distri- bution of the present program among 1 The individual items included in the Army, the Navy, and foreign the indexes of production are countries. weighted to indicate their rela- tive importance. The production Combat Vehicles rate index measures output during the month, average scheduled month- Production of combat vehicles ly production during fiscal year also reached a new high in October 1942 being the base or 100 per- as the index increased 22 points to cent. The total production index 95 for the month. This was due measures cumulated production largely to an increase in the output since the start of the program, of personnel carriers and tanks and and scheduled total output during the resumption of scout car produc- fiscal year 1942 equals 100. Out- tion. The increased acceptances put during 1942 is based upon during the month were still behind schedules in effect on August 1, August 1 schedules, however, partic- 1941, for guns and combat vehicles; ularly in the case of medium tanks for airplanes, output is based on and 13-passenger carriers. OPM schedule 8F. NOVEMBER 28, 1941 CONFIDENTIAL - II ... CONFIDENTIAL NUMBER 63 CHART I MILITARY AIRPLANES INDEX OF CUMULATIVE TOTAL PRODUCTION (TOTAL PRODUCTION, F.Y. 1942.100) 400 400 308 I 300 Should 300 Produce Foreign 273, Orders 265.4 Defense 200 200 Novy Schedule BF (Amended) 100 100 Army 442 We Have Produced 46.2 o o JASONOJFMAMJJASONDJFMAMJJASONDJFMAMJ Financed Ordered Produced 1940 1941 1942 1943 Production As of Oct.31,1941 Requirements Oct.31,1941 Oct 31, 31,1941 INDEX OF PRODUCTION DURING MONTH ( AVGE. MONTHLY PRODUCTION, F.Y.1942 = 100) 200 200 Schedule Peck Month Actual We Expected to Produce 100 IDO 80 >60 We Produced 61 0 o JASONDJFMAMJ JASONDJ FMAMJ JASONDJFMAMJ 1940 1941 1942 1943 11 ... CONFIDENTIAL NOVEMBER 28, 1941 NUMBER 63 CONFIDENTIAL ... III CHART 2 COMBAT VEHICLES INDEX OF CUMULATIVE TOTAL PRODUCTION (PRODUCTION, F.Y. 1942.100) 300 300 2078 202.2 200 Foreign 200 Orders Defense Aid We Should Produce 1130 100 100 Army and Aug. I, 1941. Navy Schedule 35.9 Actual We Have Produced 35.9 o o F M A M J J A S 0 N D J F M A M J Financed Ordered Produced 1941 1942 Production As of Oct 31, 1941 Requirements Oct 31,1941 Oct 31,1941 INDEX OF PRODUCTION DURING MONTH (AVGE. MONTHLY PRODUCTION, F.Y. 1942*100) 150 150 We Expected Schedule To Produce 107.1g 100 Actual ion We Produced 9477 72.9g 50 50 o o J F M A M J J A $ o N D J F M A M J 1941 1942 NOVEMBER 20, 1941 CONFIDENTIAL ... III IV ... CONFIDENTIAL NUMBER 63 CHART 3 ARMY-TYPE GUNS INDEX OF CUMULATIVE TOTAL PRODUCTION (PRODUCTION, FY 1942*100) 300 300 2648 250.9 Foreign Orders Defense Aid 200 200 We Should Produce 1227 100 100 Army- Novy Aug. 1,1941 Schedule 44.5 Actubl - Have Produced 44.5 o o a F M A M J J A 5 o N D J F M A M J Financed Ordered Produced 1941 1942 Production As of Oct31,1941 Requirements Oct.31,1941 Oct.31,1941 INDEX OF PRODUCTION DURING MONTH ( AVGE. MONTHLY PRODUCTION, FY. 1942*100) 150 150 Schedule We Expected To Produce Actual 111.5 100 100 We Produced 840-g 66,8 50 50 o o J F M A M / J A $ o N D J F M A M J 1941 1942 IV ... CONFIDENTIAL NOVEMBER 28, 1941 NUMBER 63 CONFIDENTIAL V DEFENSE PROGRESS SERIES DEFENSE EQUIPMENT INDEXES Major Com- Combat Airplanes Army-type Ammunition bat Ships Vehicles Guns Average monthly production FY 1942=100 BCHED. ACTUAL SCHED. ACTUAL BoHca. ACTUAL SCHED. ACTUAL SOMED. ACTUAL AS of AS of AS OF All or AS of MONTHLY PRODUCTION RATE DURING 8/1 6/1 6/1 $ 6/1 1940 July 27 16 December 38 26 { 7ª 14ª 11ᵇ 1941 March 44 34 11 30 June 55 45 31 41 13 September 87 62 61 87 73 as 67 as 20 October 71 109 80 68 207 95 118 84 61 November as 80 207 00 84 December 82 97 130 88 111 1942 January 109 208 129 100 118 February as 120 124 140 130 March 115 128, 120 119 uua June 125 189 as III jeu Av, monthly prod. FY 1942 100 100 100 100 100 Peak month Nov. '42 Oct. '42 Dec. '41 Feb. '42 June '42 TOTAL CUMULATIVE PRODUCTION TO Total production FY 1942=100 1940 July 31 2 1 - - December 31 16 8 4 7 1941 March 30 27 16 6 13 9° June 30 42 27 12 22 11 September 30 55 61 42 41 30 28 40 38 19 15 October 31 es 70 47 46 39 36 a 44 22 November 30 a 55 48 se a December 31 75 63 59 65 39 1942 January 31 as 72 a 72 48 February 28 23 82 a 85 59 March 31 103 33 89 as 72 June 30 133 127 118 123 118 Total production FY 1942 100 100 100 100 100 Financed production require- ments November 1 452 311 208 265 417d Ordered to November 1 452 265 202 251 241ᵈ To be Ordered November 1 o 46 6 14 176ᵈ July 1, '40 - Dec 31, '40 average. July 1. 140 - Apr 30, '41 average. Apr 30, '41. as of Oct. 1, '41 NOVEMBER 28, 1941 CONFIDENTIAL V VI CONFIDENTIAL NUMBER 63 UNITED STATES ARMED FORCES THOUSAND MEN THOUSAND MEN 1400 8400 2000 8000 1600 1600 1800 1800 TOTAL ARME FORCES 800 800 400 400 o o 2000 2000 1600 1800 ARMY OF us 1800 Selective Service 1800 soo 800 - Burd 400 400 Requirer Army 0 o 800 800 U.S. NAVY 400 Morine Carge 400 o o À 1 o . D 1940 (94) UNITED STATES ARMED FORCES 1940 1941 June 30 Dec. 31 March 31 June 30 Sept. 30 Oct. nº (Thousand men) ARMED PORCES ON ACTIVE DUTY TOTAL r 468 F 896 F 1,459 F 1,810 = 1,977 2,027 ARMY - TOTAL = 268 = 621 P 1,148 = 1,462 In 1,587 1,624 Regular F 265 T 426 F 486 r 510 F 535 547 Nat'l. Guard in Fed. Serv. - 156 F 289 P 284 , 273 263 3 22 , 43 I 61 7 Reserve Officers & 61 Selective Service Traineed - 17 330 7 607 7 700 733 NAVY - TOTAL I 172 ₹ 227 # 261 F 293 F 328 339 = Regular 151 T 186 P 208 221 236 139 Reserve 7 7 24 35 53 # $ 76 Coast Guard 14 17 18 19 23 24 MARINE CORPS - TOTAL 28 48 T 50 T 55 62 g. 1 Data have been revised to include the Cosst Guard, surrent officers in the regular Army and the National Guard,and Aray and Navy nurses. P Preliminary "Revised data VI CONFIDENTIAL NOVEMBER 28, 1941 NUMBER 63 CONFIDENTIAL VII United States Armed Forces of this high average there was no reported congestion at any of the More than two million men were ports. The comparable daily average in the combined armed forces of the for September was 1,736. United States on November 1, 1941, the day on which the Coast Guard, with its ships, stations, and equip- Pending Legislation ment, became part of the Navy by the President's order. Estimates of supplemental na- tional defense appropriations now Car Unloads for Exports before the House Appropriations Com- mittee total $7,646 million. $6,685 Average car unloads for export million is for the War Department, trade, other than that in grain and $830 million for the Navy Department, coal, at the Atlantic and Gulf ports and $131 million for other agencies. during October was the highest on A breakdown by agency and object is record at 1,885 per day. In spite given below: PROPOSED THIRD SUPPLEMENTAL NATIONAL DEFENSE APPROPRIATION ACT War Object Navy Other Total Dept. Dept. Agencies (Million dollars) Airplanes, parts, etc. 780 450 1,230 Naval ships and parts 260 260 Ordnance (includes Navy defense installations on merchant vessels) 3,778 120 3,898 Other munitions and supplies 809 809 Posts, depots, etc. 470 116h 586 Industrial facilities 388 388 Housing 15 15 Pay, subsistence and travel 450 450 Miscellaneous 10 10 TOTAL 6,685 830 131 7,646 A Includes contract authorization of $140 million. b Includes contract authorization of $104 million. NOVEMBER 28, 1941 CONFIDENTIAL VII NUMBER 45 CONFIDENTIAL FOOTNOTES DEFENSE PROGRESS SERIES See Opposite Page Data on obligations and unobligated balances are tentative pending determination of reserves not available for immediate obligation. n.a. Not Available r Revised P Preliminary a Total defense program includes all funds and authorizations made available for defense purposes by the United States Government plus foreign orders placed in this country since November 1939. The major portion of the ex- isting program has been approved since June 11, 1940, but some authoriza- tions (particularly portions of the naval expansion program, the merchant shipbuilding program, and the stockpile program) were made available even earlier. All funds are shown during the fiscal year in which they are a- vailable for obligation. b United States financed program includes the defense activities of all United States Government agencies (including Defense Aid) plus the defense activities of government owned corporations, but does not include foreign orders. c United States Treasury General Fund includes the defense activities of all United States Government agencies (including Defense Aid). It does not include the activities of government owned corporations or foreign orders in the United States. d Value delivered and/or in place includes (1) value delivered and/or in place for ships and value of production for other munitions, (2) checks issued by finance officers for defense construction, and (3) checks 1s- sued by finance officers for nonmunitions items. e Checks issued include value in place for nonmilitary housing. f Program and obligations for pay for civilians and for the Navy include only that specifically mentioned in appropriation bills, while the cash disbursement figures include, in addition, executive defense pay which cannot be separately distinguished in the appropriation bills. g Report on checks paid by the Treasury for the account of the Maritime Com- mission makes allowance for receipts credited to the Construction Loan Fund. h Checks paid include (1) all checks paid out of the Treasury General Fund (cf. footnote c); (2) checks issued by the Reconstruction Finance Corpora- tion and subsidiary Government corporations; (3) checks issued by foreign purchasing commissions. JUNE 20, 1941 CONFIDENTIAL NUMBER 63 CONFIDENTIAL VIII DEFENSE PROGRESS SERIES TOTAL UNITED STATES DEFENSE PROGRAM Cumulative 6/11/41 through Monthly End lst End last lat half 1 year 1 month Latest fullyear month currentso, ago ago month 6/30/41 10/31/41 11/15/41 10/40 9/41 10/41 FINANCIAL PROGRAM {Million dollars) TOTAL DEFENSE PROGRAM IN U.S. Program 41,547 67,981 '67,981 2,553 650 6,135 9,875 P 10,264 - - Unobligated balance n.a. Obligations 31,672 P 49,717 D.C. n.a. 4,308 P 2,748 Value delivered and/or in place a 8,561 P 14,259 n.a. 406 1,501 P 1,695 Checks paid b 8,503 14,129 14,997 491 1,498 1,706 L S. FINANCED PROGRAM b Program 37,862 64,212 64,212 2,015 631 6,135 P 19,264 . Unobligated balance 9,875 n.a. - - Obligations 27,987 P 45,948 n.a. n.a. 4,289 P 2,748 Checks paid b 6,430 11,721 12,549 312 1,423 1,626 TREASURY GENERAL FUND ONLY c Program 35,054 59,885 59,885 1,803 174 6,135 Unobligated balance 8,403 P 17,030 n.e. - . Obligations 26,651 P 42,855 n.s. - 3,949 P 2,601 Checks paid by S.Treasury 6,080 11,010 11,773 297 1,319 1,526 MUNITIONS PROD.& DEFENSE CONSTR. Program 36,672 57,027 57,027 1,862 303 3,676 Unobligated balance 7,312 - - 23,695 n.a. Obligations 29,360 44,805 n.a. n.a. 3,597 P 2,425 Value delivered and/or in place di 6,804 P 11,713 n.a. 301 1,090 P 1,263 Value not delivered or in 22,556 - - p 33,692 - place n.a. MUNITIONS PRODUCTION, TOTAL Program 27,866 44,250 44,250 1,192 198 3,298 Unobligated balance 4,501 20,889 - - n.a. Obligations 23,365 34,834 n.a. n.a. 3,057 P. 1,203 Value delivered and/or in place 4,434 P 7,325 21% 759 P 858 n.s. Value not delivered and/or 18,931 a - in place 27,509 - n.a. AIRPLANES PARTS & ACCESSORIES Program 8,481 13,173 13,173 397 1 655 Obligations 7,281 A 11,044 n.a. 809 a 513 n.a. Value delivered 1,010 P 1,768 n.a. 50 194 P 251 ORDNANCE Program 7,780 13,330 13,330 199 -126 1,553 Obligations 5,418 P 9,921 n.a. n.a. 1,524 P 359 Value delivered 698 P 1,278 31° 180 P 177 n.a. 4131 Table continued on following page. for footastes see opposite page. NOVEMBER 28, 1941 CONFIDENTIAL VIII NUMBER 45 CONFIDENTIAL FOOTNOTES DEFENSE PROGRESS SERIES See Opposite Page Data on obligations and unobligated balances are tentative pending determination of reserves not available for immediate obligation. n.a. Not Available I Revised P Preliminary a Total defense program includes all funds and authorizations made available for defense purposes by the United States Government plus foreign orders placed in this country since November 1939. The major portion of the ex- isting program has been approved since June 11, 1940, but some authoriza- tions (particularly portions of the naval expansion program, the merchant shipbuilding program, and the stockpile program) were made available even earlier. All funds are shown during the fiscal year in which they are a- vailable for obligation. b United States financed program includes the defense activities of all United States Government agencies (including Defense Aid) plus the defense activities of government owned corporations, but does not include foreign orders. c United States Treasury General Fund includes the defense activities of all United States Government agencies (including Defense Aid). It does not include the activities of government owned corporations or foreign orders in the United States. d Value delivered and/or in place includes (1) value delivered and/or in place for ships and value of production for other munitions, (2) checks issued by finance officers for defense construction, and (3) checks 1s- sued by finance officers for nonmunitions items. e Checks issued include value in place for nonmilitary housing. f Program and obligations for pay for civilians and for the Navy include only that specifically mentioned in appropriation bills, while the cash disbursement figures include, in addition, executive defense pay which cannot be separately distinguished in the appropriation bills. g Report on checks paid by the Treasury for the account of the Maritime Com- mission makes allowance for receipts credited to the Construction Loan Fund. h Checks paid include (1) all checks paid out of the Treasury General Fund (cf. footnote c); (2) checks issued by the Reconstruction Finance Corpora- tion and subsidiary Government corporations; (3) checks issued by foreign purchasing commissions. JUNE 20, 1941 CONFIDENTIAL NUMBER 63 CONFIDENTIAL IX DEFENSE PROGRESS SERIES TOTAL UNITED STATES DEFENSE PROGRAM Cumulative 6/11/41 through Monthly End 1st End last 1st half 1 year 1 month Latest full year month current no ago ago month 6/30/41 10/31/41 11/15/41 10/40 9/41 10/41 (Million dollars) NAVAL SHIPS Program 6,666 8;255 8,255 21 311 110 Obligations 6,434 P 7,506 P 7,521 n.s. 180 P 37 Value delivered and/or in place 960 P 1,589 n.a. 54 148 # 161 MERCHANT SHIPS Program 1,606 3.867 3,867 10 o 857 Obligations 1,344 P 2,251 n.a. n.a. 180 P 268 Value delivered and/or in place 188 P 325 n,a, 10 37 P 51 OTHER MUNITIONS AND SUPPLIES Program 3,333 5,625 5,625 565 12 123 Obligations 2,888 P 4,112 n.s. n.a. 364 P 26 Value delivered 1,578 P 2,365 n.a. 69 200 P 218 DEFENSE CONSTRUCTION TOTAL Program 8,806 12,777 12,777 570 105 378 Unobligated balance 2,811 P 2,806 n.a. - - Obligations 5,995 P 9,971 n.a. n.a. 540 P 1,222 Checks issued by agencies 2,370 P 3,788 n.a. 87 331 P 405 Value unpaid obligations 3,625 P 6,183 n.a. - - INDUSTRIAL FACILITIES Program 5,385 7,830 7,830 322 95 381 Obligations 3,056 P 5,612 n.a. n.a. 282 P 783 Checks issued by agencies 808 P 1,610 n.a. 29 216 P 240 POSTS, DEPOTS, STATIONS Program 2,969 4,305 4,305 98 10 -3 Obligations 2,664 3,950 n.a. n,a, 214 P 398 Checks issued by agencies 1,448 P 1,910 s.a. 58 115 P 130 HOUSING, NON-MILITARY Program 452 642 642 150 o o Obligations 275 409 421 n.a. 44 P 41 Value in place e 114 P 268 n.a. n.a. n,a, P 35 NON-MUNITIONS ITEMS, TOTAL Program 4,875 10,954 10,954 791 347 2,459 Unobligated balance 2,563 P 61042 n.s. - - Obligations 2,312 P 4,912 n.a. n.a. 711 P 323 Checks issued by agencies e 1,757 P 3,146 n.a. 105 411 P 432 STOCKPILE Program 983 1,631 1,631 102 368 0 Obligations 470 910 n,a, n.a. 251 P 0 Checke issued by agencies 192 P 365 n.a. 11 55 P 70 Table continued on following page. For footnotes see opposite page. 9131 NOVEMBER 28, 1941 CONFIDENTIAL IX NUMBER 45 CONFIDENTIAL FOOTNOTES DEFENSE PROGRESS SERIES See Opposite Page Data on obligations and unobligated balances are tentative pending determination of reserves not available for immediate obligation. n.a. Not Available F Revised P Preliminary a Total defense program includes all funds and authorizations made available for defense purposes by the United States Government plus foreign orders placed in this country since November 1939. The major portion of the ex- isting program has been approved since June 11, 1940, but some authoriza- tions (particularly portions of the naval expansion program, the merchant shipbuilding program, and the stockpile program) were made available even earlier. All funds are shown during the fiscal year in which they are a- vailable for obligation. b United States financed program includes the defense activities of all United States Government agencies (including Defense Aid) plus the defense activities of government owned corporations, but does not include foreign orders. c United States Treasury General Fund includes the defense activities of all United States Government agencies (including Defense Aid). It does not include the activities of government owned corporations or foreign orders in the United States. d Value delivered and/or in place includes (1) value delivered and/or in. place for ships and value of production for other munitions, (2) checks issued by finance officers for defense construction, and (3) checks 1s- sued by finance officers for nonmunitions items. e Checks issued include value in place for nonmilitary housing. f Program and obligations for pay for civilians and for the Navy include only that specifically mentioned in appropriation bills, while the cash disbursement figures include, in addition, executive defense pay which cannot be separately distinguished in the appropriation bills. g Report on checks paid by the Treasury for the account of the Maritime Com- mission makes allowance for receipts credited to the Construction Loan Fund. h Checks paid include (1) all checks paid out of the Treasury General Fund (of. footnote % (2) checks issued by the Reconstruction Finance Corpora- tion and subsidiary Government corporations; (3) checks issued by foreign purchasing commissions. JUNE 20, 1941 CONFIDENTIAL NUMBER 63 CONFIDENTIAL ... H DEFENSE PROGRESS SERIES TOTAL UNITED STATES DEFENSE PROGRAM Cumulative 6/11/41 through Monthly End 1st End last 1st half 1 year 1 month Latest full year month current nc ago ago month 6/30/41 10/31/41 11/15/41 10/40 9/41 10/41 (Million dollars) AGRICULTURAL & MISC, EXPORTS (DEFENSE AID) Program 1,250 3,043 3,043 - o 1,949 Obligations 109 AB 790 n.a. - 214 P 76 Checks issued by agencies 6 206 n.a. - 81 P 77 PAY, SUBSISTENCE & TRAVEL f Army Military Program 944 2,563 2,563 505 o o Obligations 934 P 1,684 n.a. 28 167 P 146 Checks issued 696 P 1,206 n.a. 37 131 P 134 Navy Military Program 334 804 804 2 0 0 Obligations 334 P 490 505 23 44 P 29 Checks issued 388 P 561 n.a. 29 52 P 57 Civilian Payroll Program 103 162 162 28 o 16 Obligations 103 P 117 n.a. 23 o P 4 Checks issued 356 P 558 n.a. 23 52 P 54 MISCELLANEOUS NON-MUNITIONS Program 1,261 2,751 2,751 154 -21 494 Obligations 362 P 921 n.a. - 35 P 68 Checks issued by agencies 119 P 250 n.a. 5 40 P 40 AGENCIES U. S, ARMY PROGRAM 13,135 24,606 24,606 1,377 o o Obligations 11,404 20,598 n.a. n.a. 2,141 P 1,379 Checks paid by U.S.Treasury 3,636 6,209 6,590 134 700 P 785 U. S. NAVY PROGRAM 12,389 17,627 17,734 85 174 113 Obligations 11,225 14,681 14,859 - 868 P 569 Checks paid by 1.3.Treasury 2,217 3,791 4,017 150 377 P 442 DEFENSE AID PROGRAM 7,000 12,985 12,985 - o 5,985 Allocations 5,177 6,784 n.a. - 175 P 315 Obligations 2,458 4,826 n.a. - 778 P 365 Checks Paid by U.S.Treasury 21 456 559 - 140 P 192 U. S. MARITIME COMMISSION Program 795 2,371 2,371 o o -2 Obligations 716 1,635 n.a. - 118 P 232 Checks paid by U.S.Treasury (net) to 44 94 109 10 26 P 21 R.F.C.&SUBSIDIARIES Program 2,808 4,327 4,327 212 457 o Obligations 1,336 3,093 n.a. - 340 P 147 Checks issued by R. F. C. 350 711 776 15 104 P 100 Table continued on following page. For footnotes see opposite page. 4131 NOVEMBER 28, 1941 CONFIDENTIAL X NUMBER 45 CONFIDENTIAL FOOTNOTES DEFENSE PROGRESS SERIES See Opposite Page Data on obligations and unobligated balances are tentative pending determination of reserves not available for immediate obligation. n.a. Not Available I Revised P Preliminary a Total defense program includes all funds and authorizations made available for defense purposes by the United States Government plus foreign orders placed in this country since November 1939. The major portion of the ex- isting program has been approved since June 11, 1940, but some authoriza- tions (particularly portions of the naval expansion program, the merchant shipbuilding program, and the stockpile program) were made available ever earlier. All funds are shown during the fiscal year in which they are a- vailable for obligation. b United States financed program includes the defense activities of all United States Government agencies (including Defense Aid) plus the defense activities of government owned corporations, but does not include foreign orders. o United States Treasury General Fund includes the defense activities of all United States Government agencies (including Defense Aid). It does not include the activities of government owned corporations or foreign orders in the United States. d Value delivered and/or in place includes (1) value delivered and/or in place for ships and value of production for other munitions, (2) checks issued by finance officers for defense construction, and (3) checks 1s- sued by finance officers for nonmunitions items. e Checks issued include value in place for nonmilitary housing. f Program and obligations for pay for civilians and for the Navy include only that specifically mentioned in appropriation bills, while the cash disbursement figures include, in addition, executive defense pay which cannot be separately distinguished in the appropriation bills. g Report on checks paid by the Treasury for the account of the Maritime Com- mission makes allowance for receipts credited to the Construction Loan Fund. h Checks paid include (1) all checks paid out of the Treasury General Fund (ef. footnote % (2) checks issued by the Reconstruction Finance Corpora- tion and subsidiary Government corporations; (3) checks issued by foreign purchasing commissions. JUNE 20, 1941 CONFIDENTIAL NUMBER 63 CONFIDENTIAL. XI DEFENSE PROGRESS SERIES TOTAL UNITED STATES DEFENSE PROGRAM Cumulative 6/11/40 through Monthly End 1st End last 1st half 1 year 1 month Latest full year month current.mo no ago ago month 6/30/41 10/31/41 11/15/41 10/40 9/41 10/41 (Million dollars) OTHER U. S. AGENCIES Program 1,735 2,296 2,296 341 o 39 Obligations 848 P 1,115 n.a. - 44 P 55 Checks paid by ,Treasury 162 460 498 3 76 P 86 FOREIGN ORDERS Program (orders) 3,685 3,769 3,769 538 19 o Obligations 3,685 3,769 3,769 538 19 o Checks issued by Purchasing Missions 2,073 2,408 2,448 179 75 P 80 OTHER DEFENSE INDICATORS VALUE OF FACIL. ON APPLIC. FOR CERT. OF NECESSITY (Million dollars) Total 1,424 n.a. n.a. - 199 n.a. Approved, private funds 829 n.a. n.a. - 52 n.a. Approved, public funds 201 n.a. n.a. - 8 n.a. Disapproved 7 n.a. n.a. - 2 n.a. Pending 387 n.a. n.a. - 137 n.a. DEFENSE HOUSING (Number of dwelling units) Fund allocations 110,298 141,522 141,522 4,250 11,440 4,692 Cons, contracts awarded 78,820 115,141 119,451 10,469 8,178 11,970 Construction Completed 21,768 54,884 59,861 o 6,546 9,300 ECONOMIC ACTIVITY RELATED TO DEFENSE 1940 1941 July January September October DEFENSE EMPLOYMENT (Thousand workers) Private, 18 major indus. 1,660 2,038 2,660 Private, controts. pub.constr i 13 448 435 117 r Public 171 234 r 1,790 F Total direct defense 2,657 3,329 Selected defense indus. (Indexes 1939 = 100) Firearms 164.0 241.4 399.1 424.7 Ammunitions 144.6 245.8 394.7 408.3 Explosives 142.5 176.6 414.2 473.9 LABOR DISPUTES IN PLANTS WITH IMPORTANT DEFENSE CONTRACTS Number strikes in progress n.s. 13 P 18 P 26 Workers involved (thousand) n.a. 26 P 17 P 32 Man days idle (thousand) 'n.a. 146 P 111 P 192 r Revised data P Preliminary n.a. Data not available NOVEMBER 28, 1941 CONFIDENTIAL XI XII NUMBER 63 INDUSTRIAL PRODUCTION NATIONAL INCOME & DEFENSE EXPENDITURES TOTAL POINTS IN INDEX BILLION DOLLARS ISO 100 ANNUAL RATE 160 80 140 NATIONAL INCOME PAYMENTS INDUSTRIAL PRODUCTION 120 60 100 80 40 DURABLE MANUFACTURES 60 40 20 20 DEFENSE EXPENDITURES o o J A $ o N D J F M A M J J A 5 o N o J A 5 o N o / F M A M J J A 5 o N o 1940 1941 1940 1941 COST OF LIVING NET FEDERAL DEBT, 1914-41 1935-39=100 GROSS DEBT LESS BALANCE IN GENERAL FUND INDEX BILLION DOLLARS 110 60 50 100 1939-41 40 90 30 20 80 10 1914-17 TO o JASONDJ A so NO / A SOND JF MAM J 19:4 20 25 30 at 40 JFMAMJ J ASON D 1941 END OF CALENDAR YEAR END OF MONTH XII NOVEMBER 28, 1941 XIII NUMBER 63 ECONOMIC ACTIVITY RELATED TO DEFENSE (Series on these pages are not confidential and are in- cluded for the convenience of readers of Defense Progress) 1940 1941 July January September October Wook ending Nov. 15 Nov. 22 FED. RES. BD. PROD. INDEXES (Unadjusted Indexes 1935-39 . 100) Total industrial production 135 167 P 120 169 Durable manufactures 131 166 206 P 210 Nondurable manufactures 111 -118 145 P 145 Minerals 121 113 137 P 139 BUR. FOR, & DOM. COM. MFRS. (Indexes) ORDERS, SHIPMENTS, INVENTORIES Now orders, total (1/39-100) 127 176 P 198 Shipments, total (1/39=100) 117 148 P 204 Inventories," (12/31/38=100) 109.2 120.8 P 137.5 Durable (12/31/38-100) 111.9 129.7 P 149.8 Nondurable (12/31/38-100) 106.4 111.2 P 124.2 BLS. PRICE INDEXES (Indexes) Strategic Material (8/39=100) 123.6 126.1 142.8 143.0 143.3 143.3 Critical Materials (8/39-100) 107.5 111.7 117.3 116.7 116.8 116.8 Basic Commodities (8/39=100) 108.5 120.5 155.6 153.1 153.9 154.6 Machine tools (8/39-100) 108.7 114.6 118.9 119.4 - - All commodities (1926-100) 77.7 80.8 91.8 92.4 92.3 92.2 (1935-39 a 100) BLS COST OF LIVING INDEX 100.3 100.8 108.1 109.4 TRANSPORTATION & ELECTRIC POWER (Averages) Freight cars Loadings( thous.per week) 706 684 885 914 884 799 Unloads for export (dly.) 1,502 1,352 1,736 1,885 1,928 1,796 Surplus, total (thous.dly.) 133 110 41 44 53 Boxcars 57 43 15 19 27 Coal cars 47 42 10 11 13 Power prod. (mil.kwk.wkly.) 2,731 3,080 F 3,348 3,439 3,304 3,205 NATIONAL INCOME (Billion dollars, annual rate) Total income payments 75.2 81.7 P 92.2 FEDERAL DEBT (Billion dollars, end of month) Net public debt 41.5 43.9 49.1 50.9 EMPLOYMENT (Thousand workers) Total civil nonagricultural 35,454 36,621 40,715 P40,749 Total WPA employment 1,655 1,890 1,037 1,040 1,056 1,058 Defense Private, 18 major indus. . controtrs., pub.constr Confidential data. See Page II Public Total direct defense Deep-sea merchant vessels 51 49 50 50 UNEMPLOYMENT (NPA ESTIMATE) (Million workers) Number of unemployed 9.3 7.6 - 4.5 3.9 F Revised data. P Preliminary data. n.s. Data not available. Graph appears on opposite page. XIII NOVEMBER 28, 1941 NUMBER 63 XIV DEFENSE PROGRESS SERIES ECONOMIC ACTIVITY RELATED TO DEFENSE 1940 1941 Week ending July January September October Nov. 15 Nov. 22 EMPLOYMENT IN 18 MAJOR PRIVATE DEFENSE INDUSTRIES 1 (Indexes 1939 - 100) All eighteen industries 123.3 151.3 I 198.4 202.5 Blst. furn., st. wks., etc. 116.7 128.7 F 146.0 145.3 Foundry. & Mach. shop prod. 114.8 137.5 r 172.1 172.8 Elect. mach., app. & supp. 115.3 143.8 r 187.4 188.8 Smelting and refining 112.7 124.0 r 130.5 128.3 Brass, bronze, copper prod. 114.5 151.5 172.2 170.8 Aluminum manufactures 121.2 146.5 r 159.7 157.9 Machine tools 155.6 189.4 r 236.2 239.5 Machine tool accessories 139.7 167.7 r 242.1 248.7 Abrasives 112.1 150.7 r 190.9 193.6 Screw-machine products 115.9 156.9 r 203.2 209.5 Airframes 222.2 355.7 r 605.1 646.5 Aero-engines 299.2 434.1 r 753.9 804.5 Shipbuilding 138.7 195.8 r 358.3 394.2 Firearms Ammunitions Confidential data. See Page-XI Explosives Optical goods 111.9 138.1 I' 174.3 177.0 Instruments 115.7 147.9 r 200.3 219.6 LABOR DISPUTES PLANTS WITH IMPORTANT DEFENSE CONTRACTS Number strikes in progress Workers involved (thous.) Confidential data. See Page II Man days idle (thous.) ALL INDUSTRIES Number strikes in progress 390 r 340 P 765 P 710 Workers involved (thous.) 83 109 P 345 P 365 Man days idle (thous.) 529 r 660 P 1,925 P 1,960 LABOR TURN OVER 1 (Rate per 100 employees) ALL MANUFACTURING Total accession 4.77 5.54 5.16 Total separation 3.35 3.41 4.53 Quit 0.85 1.31 2.81 Layoff 2.25 1.61 1.16 Discharge 0.14 0.18 0.31 Military separation n.a. 0.19 0.13 7 MAJOR DEFENSE INDUSTRIES Total accession 5.09 7.10 6.31 Total separation 1.85 2.70 4.05 Quit 0.84 1.24 2.61 Layoff 0.73 0.79 0.81 Discharge 0.15 0.22 0.32 Military separation n.a. 0.23 0.14 "Revised data, P Preliminary data. n.a. Data not available. 1 Bureau of Labor Statistics NOVEMBER 28, 1941 XIV NUMBER 63 IV DEFENSE PROGRESS SERIES ECONOMIC ACTIVITY RELATED TO DEFENSE 1940 1941 Wook ending July January September October Nov. 15 Nov. 22 (Rate per 100 employees) AIRCRAFT Total accession 12.40 12.17 11.30 Total separation 3.57 3.65 3.94 Quit 2.96 2.44 3.20 Layoff 0.15 0.33 0.12 SHIPBUILDING Total accession 13.00 18.21 13.85 Total separation 5.40 7:91 6.15 Quit 1.14 1.93 3.00 Layoff 3.71 4.78 2.15 MACHINE TOOLS Total accession 3.05 6.68 5.21 Total separation 2.09 2.44 3.53 Quit 1.28 1.77 2.76 Layoff 0.21 0.09 0.14 AVERAGE HOURS WORKED PER WEEK 1 (Hours) Machine tools 47.5 50.4 51.5 Aircraft 42.0 44.7 45.5 Shipbuilding 39.3 42.0 44.9 AVERAGE HOURLY EARNINGS 1 (Cents) Machine tools 76.8 79.7 87.0 Aircraft 73.8 77.6 85.6 Shipbuilding 86.2 89.3 104.0 AVERAGE WEEKLY EARNINGS 1 (Dollars) Machine tools 36.45 40.15 44.77 Aircraft 30.48 34.13 38.58 Shipbuilding 34.03 37.69 46.69 UNITED STATES FOREIGN TRADE (Million dollars) Exports Total exports 317 325 417 Exports by destination United Kingdom 108 117 143 Canada 65 62 89 British Asia 24 28 40 China 10 8 8 Latin America 58 59 82 Other pro-democratic areas 11 21 28 Russia 6 3 11 Portugal and Spain 4 2 2 Axis& Axis dominated areas 21 18 6 All other 8 8 8 (Parcent of total exports) Exports licensed 9.7 37.0 n.a. "Revised data. P Preliminary data. n.a. Data not available. 1 Bureau of Labor Statistics NOVEMBER 28, 1941 XV NUMBER 63 XM DEFENSE PROGRESS SERIES ECONOMIC ACTIVITY RELATED TO DEFENSE 1940 1941 July January September October Week ending Nov. 15 Nov. 22 Imports (Million dollars) Imports for consumption 218 224 265 Imports by origin United Kingdom 16 10 14 Canada 37 35 52 British Asia 55 63 75 China 10 5 8 Latin America 52 67 77 Other pro-democratic area 13 10 11 Russia 1 2 3 Portugal and Spain 2 2 3 Axis&Axis dominated areas 23 20 10 All other 9 9 12 (Percent of total imports) Strategic and critical materials 31.1 40.9 P 39.0 Revised data P Preliminary data. n.a. Data not available. NOVEMBER 28, 1941 XII RULES FOR CUSTODY OF 'DEFENSE PROGRESS' Recipients of Defense Progress, agree to act as the custodians of all copies delivered to them and to abide by the following rules which have been adopted to aid in enfore- ing the Espionage Act: (1) Not to permit information from any copy in their custody to become available to anyone except & Government employee under their in- mediate supervision who will be bound by the restrictions hereby agreed to and who requires access to Defense Progress in connection with his official duties. (2) To keep all copies in a securely locked con- tainer when not actually in use. (3) Not to incorporate information from Defense Progress in any record unless the use of such record is restricted as if the record were it- self a copy of Defense Progress. (4) To give prior written notice of any change of address to the Bureau of Research and Statis- tics. (5) On written request from the Bureau of Research and Statistics, or before separation from the Government position which entitles them to re- ceive Defense Progress, to return all copies charged to their account. CONFIDENTIAL DEFENSE PROGRESS SPECIAL ARTICLES DEFENSE PROGRESS SERIES ECONOMIC DATA DEFENSE PROGRESS CONFIDENTIAL NUMBER 64 DECEMBER 5, 1941 Office of Production Management BUREAU OF RESEARCH & STATISTICS STACY MAY, CHIEF DEFENSE PROGRESS Issued to The President Copy Number 1 This report is logned to you by the Bureau of Rèsearch and Statistics of the Office of Production Management for official use. It contains CONFIDENTIAL information affecting the defense of the United States. Revelation of its contents in ony manner to unauthorized persons is prohibited by the Espionage Act. See inside of back page for Rules for Custody of Defense Progress DEFENSE PROGRESS BUREAU OF RESEARCH AND STATISTICS. STACY MAY, CHIEF ECONOMIC ANALYSIS BRANCH MORRIS A. COPELAND, CHIEF LESTER S. KELLOGG, ASSISTANT CHIEF & EDITOR This summary contains CONFIDENTIAL information affecting the defense of the United States. Reveration of its contents in any manner to unautherised persons is prohibited by the Explanage Act. CONFIDENTIAL NUMBER 64 DEFENSE PROGRESS DECEMBER 5,1941 BRIEFS OF CONTENTS Page FORECAST II OF DEFENSE PRODUCTION indicates that by the end of fiscal 1943 production of muni- tions and defense construction will be at an an- nual rate of $34 billion. The total value pro- duced during the three fiscal years 1940 to 1943 will amount to 859 billion. By the end of 1942 the value of munitions production and defense construction under present schedules will be $42 billion as compared with $34 billion estimated in Forecast I of defense production made in April 1941. 1 THE NONDEFENSE PORTION OF THE NATIONAL PRODUC- TION began to decline about the middle of 1941. With the extension of the defense program, the nondefense portion is destined to become B. smaller proportion of an enlarged national pro- duction. From the last quarter of 1940 to the last quarter of 1941 defense production increased from 8 to 22 percent of the national total. 7 THE RECENT TRADE AGREEMENT BETWEEN THE UNITED STATES AND ARGENTINA, made possible by the war emergency, will aid the defense program by fa- cilitating the import of strategic and critical materials, improve economic conditions in Argen- tina, and promote hemisphere solidarity. 10 THE UNITED STATES AND CANADA are laying the foundation for what may become permanent eco- nomic collaboration through cooperation in de- fense efforts. The collaboration is being im- plemented by the Joint Economic and other com- mittees operating in the fields of common defense problems. 12 DEFENSE PROGRESS SERIES. The Third Supplemental National Defense Appropriation Bill of 1942 was reported out of committee to the House on Decem- ber 3, 1941. The monthly production index of ammunition reached a new high in October at 22. This was 35 percent of the scheduled index for that date. The total cumulated production index for ammunition stood at 17 at the end of October: H DECEMBER 5. 1941 CONFIDENTIAL NUMBER 64 CONFIDENTIAL ... FORECAST II OF MUNITIONS PRODUCTION AND DEFENSE CONSTRUCTION FORECAST H OF DEFENSE PRODUCTION INDICATES THAT BY THE END OF FISCAL 1943 PRODUCTION OF MUNITIONS AND DEFENSE CONSTRUCTION WILL BE AT AN ANNUAL RATE OF $34 BILLION. THE TOTAL VALUE PRODUCED DURING THE THREE FISCAL YEARS 1940 TO 1943 WILL AMOUNT TO $59 BILLION. By THE END OF 1942 THE VALUE OF MUNITIONS PRODUCTION AND DEFENSE CONSTRUCTION UNDER PRESENT SCHEDULES WILL BE $42 BILLION AS COMPARED WITH $34 BILLION ESTIMATED IN FORECAST I OF DE- FENSE PRODUCTION MADE IN APRIL 1941. T he United States defense program present time 857 billion have been will produce munitions and de- provided. If the third Supplemen- fense construction amounting to tary Appropriation Bill is passed, $59 billion by June 30, 1943. This funds for munitions production and assumes that present production defense construction will total a- schedules will be met and that the bout $64 billion. production of each item of materiel which is not yet fully scheduled to that date will be continued beyond The following table shows de- present schedules at the highest tails of Defense Production Fore- rate on such schedules. At the cast No. II by quarters: PRODUCTION FORECAST II VALUE OF MUNITIONS PRODUCTION AND DEFENSE CONSTRUCTION# F.Y. 1941 P.Y. 1942 P.Y. 1943 Funds Provided овлеств July- Jan.- July- Oct.- Jan.- Apr.- July- Oct.- Jan.- Apr.- Total Incl. Dec. June Sept. Dec. Mar. June Sept. Dec. Mar. June Pending 1940 1941 1941 1941 1942 1942 1942 1942 1943 1943 3rd Sup. (Million Dollars) Planes 315 695 510 725 1,070 1,435 1,745 1,925 2,075 2,280 12,775 14,400 Ordnance 225 475 400 665 1,205 1,620 1,980 2,440 2,650 2,650 14,330 17,200 Navel Ships 290 670 470 560 575 610 635 670 690 690 5,860 8,500 Merchant Shipe 65 125 50 200 300 375 375 375 375 375 2,645 3,800 Other Ind. Prod. 660 920 565 725 935 995 1,035 1,035 1,035 1,035 8,940 6,400 Total Munitime Production 1,555 2,885 2,025 2,895 4,085 5,035 5,770 6,445 6,825 7,030 44,550 50,300 Industrial Facilities" 200 760 750 800 650 850 850 850 850 850 7,610 6,200 Other Construction 580 965 650 650 650 650 650 650 650 650 6,745 5,700 Total Defense Construction* 760 1,725 1,400 1,450 1,500 1,500 1,500 1,500 1,500 1,500 14,355 13,900 Total Munitions Production and Defense Const. 2,335 4,610 3,425 4,345 5,585 6,535 7,270 7,945 8,325 8,530 58,905 64,200 Exclusive of pay, aubsistence, travel and other nonindustrial items. Includes equipment for Industrial Facilities, A DECEMBER 5, 1941 CONFIDENTIAL ... 2 ... CONFIDENTIAL NUMBER 64 PRODUCTION FORECAST II CHART I - MUNITIONS PRODUCTION AND DEFENSE CONSTRUCTION EXCLUSIVE OF PAY, SUBSISTENCE, TRAVEL, AND OTHER NONINDUSTRIAL ITEMS MILLION DOLLARS MONTHLY VALUES MILLION DOLLARS 3000 3000 2500 2500 2000 2000 TOTAL 1500 1500 MUNITIONS PRODUCTION 1000 1000 500 500 DEFENSE CONSTRUCTION o o J A S o N D J F M A M J J A S o N D J. F M A M J J A $ o N D J F M A M J 1940 1941 1942 1943 2 ... CONFIDENTIAL DECEMBER 5, 1941 NUMBER 64 CONFIDENTIAL 3 The above forecast of $59 bil- travel of military forces and for lion for munitions production and various other items not involving defense construction by June 30, difficult problems of industrial 1943, may be compared with the In- production. Chief among these other terim estimate of $50 billion pres- items are (a) agricultural products ented in the Second Defense Aid for Defense Aid and (b) the stock- Hearings in September 1941. en The pile program. These items have not $9 billion increase over that fore- been included because of the impos- cast is divided about evenly among sibility of forecasting changes in four parts of the defense program-- the strength of the armed forces, airplanes, ordnance, facility con- revisions of rates of pay for mili- struction, and other construction. tary service, procurement of raw ma- The above forecast may be compared terials, and shipments of agricul- also with Defense Production Fore- tural products under Defense Aid. At cast I presented in Defense Progress, the present time these add about Issue Number 34, on April 4, 1941. $400 million per month. According to the present forecast, munitions production and defense Our total defense effort (see construction will total $42 billion top line on Chart 1) is scheduled to by the end of 1942. According to reach a level next April equivalent Forecast I made last April, total to an annual rate in excess of $25 munitions production and defense billion, and to reach a $27 billion construction by the end of 1942 at level in June 1942. By June 1943 the extension of production peaks on the annual rate should be in excess the schedules existing at that time of $34 billion. As indicated by the would have totaled $34 billion. As lowest curve on Chart 1, these fore- compared with Forecast I the present casts assume that construction of forecast includes increases of about industrial facilities, of fortifica- $2 billion each in the industrial tions, of facilities at military facility and "other construction" posts and stations, and of nonmili- estimate, $1.5 billion each for na- tary defense housing will involve val ships and miscellaneous indus- the continuation of the present rate trial production, $0.7 billion in on the total defense construction the estimate of merchant ship con- program through June 1943. This struction during the period, and would require an increase in the de- $0.3 billion for planes. fense construction program of a bil- lion dollars beyond present autho- The scheduled growth in the rized funds, which amount to $5,700 monthly rate of defense activity is million for this class. shown in Chart 1. Munitions produc- tion is expected to increase from & Forecasts of the monthly rate current monthly rate of about $1 of production for all munitions and billion to $2.4 billion by June 1943 and production and construction, from $1.5 billion to $2.9 billion. & Hearings, before Senate Subcommit- tee of the Committee on Appropria- These figures do not include tions, re Second Defense Aid Act estimates for pay, subsistence, and (HR 5788), Part I, page 62. DECEMBER 5, 1941 CONFIDENTIAL 3 4 CONFIDENTIAL NUMBER 64 PRODUCTION FORECAST II CHART 2 - MUNITIONS PRODUCTION MILLION DOLLARS MONTHLY VALUES MILLION DOLLARS 3000 3000 OTHER INDUSTRIAL PRODUCTION 2500 soo soo 2500 2000 0 o 2000 1940 1941 1942 1943 1500 1500 TOTAL 1000 1000 ORDNANCE PLANES 500 500 SHIPS o o J A SONDJFMAMJJASOND J F M A M J J A $ 0 N D J F M A M J 1940 1941 1942 1943 4 CONFIDENTIAL DECEMBER 5, 1941 5 NUMBER 64 CONFIDENTIAL for the four main classes-ships, ules set forth herein. If the fill planes, ordnance, and other in- ins beyond peak rates for planes, dustrial production-are shown in ships, and ordnance are not worked Chart 2. The ship production curve out, munitions production for fiscal representing, in general, monthly 1943 will be $3 billion below the additions to value in place, rises scheduled figure. AS 18 shown by the steadily until after the middle of shadow bar in Chart 3. If the sched- 1942. Merchant ship production uled peak rates of production are to reaches a peak in May and is carried be reached during the months now at this level thereafter. It is as- shown, planned increases in facility sumed that additions to the Naval utilization must be realized and new vessel program will maintain the facilities must be completed and e- November 1942 peak rate for Navy quipped according to existing facili- ship construction through the fol- ty construction schedules. Funds lowing June. The airplane produc- for the facility program, including tion curve is based on 8-G Sched- estimates in the Third Supplementary ules. The forecasts assume that Appropriation Bill now pending, additions to the plane program, in- total $8.2 billion. If an annual cluding maintenance, will be suffi- construction rate of $3.4 billion is cient to continue each plant at peak maintained, it will take until the operations from the time it reaches end of August 1943 to complete the its present scheduled peak until June 1943. The ordnance curve rep- PRODUCTION FORECAST n resents the value of deliveries and CHART 3-VALUE OF MUNITIONS in the case of Army-type guns and combat vehicles, once the peak rate PRODUCTION & DEFENSE CONSTRUCTION of production under November 1 32.0 Billions schedules has been attained, it is Volue assumed that it will be possible to Ind. Fee Without 3.4 Fill-in maintain production thereafter at Other Const: that rate. In the case of ammunition 34 the schedule rises steadily as far 12 Other Prod. as the schedule runs-through Decem- 4.) ber 1942. It is carried forward at that level for the next six months. $199 Billions Ships 4.2 3.3 39 For the immediate future the present forecast may be taken as 16 definite since relatively little can be done to better the schedules as 3.2 97 95 shown. An immediate decision to in- crease defense production could un- 3.2 doubtedly affect the magnitude of $6.9 Billions the defense output during fiscal D year 1943. However, & substantial 8.0 59 degree of planning at the present time for additional production is essential even to achieve the sched- EY,1941 EX1942 F.Y. 1943 DECEMBER 5, 1941 CONFIDENTIAL 5 6 ... CONFIDENTIAL NUMBER 64 present facility program. Moreover, cipated it will take somewhat longer if machine tool production is con- to equip the facilities included in tinued at the future rates now anti- the present program. TECHNICAL NOTE In addition to the assumptions stated in the text, the following assump- tions are also made in the above forecast: 1. Values were computed on the basis of existing prices and take no account of price changes which may occur. 2. Aircraft-that total deliveries of spare parts and equipment will equal the total funds, including the pending Third Supplementary Bill, provided for them, and that such deliveries will be distributed by quarters in the same way as are deliveries of planes. 3. Ships-that for major naval ships and for merchant ships produc- tion is measured by the increase in the quantity "percent completion times estimated total cost;" production of minor naval craft is measured by deliveries. 4. Other industrial production-that miscellaneous munitions, for which it was not practicable to use delivery schedule data, will be delivered at 8. rate to use up all funds provided to date and that this rate will continue through fiscal 1943. 6 ... CONFIDENTIAL DECEMBER 5, 1941 NUMBER 64 CONFIDENTIAL 7 DEFENSE PRODUCTION AND NATIONAL OUTPUT THE NONDEFENSE PORTION OF THE NATIONAL PRODUCTION BEGAN TO DECLINE ABOUT THE MIDDLE OF 1941. WITH THE EXTENSION OF THE DEFENSE PROGRAM, THE NONDEFENSE PORTION IS DESTINED TO BE- COME A SMALLER PROPORTION OF AN ENLARGED NATIONAL PRODUCTION. FROM THE LAST QUARTER OF 1940 TO THE LAST QUARTER OF 1941 DEFENSE PRODUCTION INCREASED FROM 8 TO 11 PERCENT OF THE NATIONAL TOTAL. T hroughout the first nine months CHART I - DEFENSE AND of the defense program the value NONDEFENSE PRODUCTION of both defense and nondefense production expanded rapidly. By the IN THE NATIONAL INCOME ANNUAL RATES BY QUARTERS second quarter of 1941, however, de- fense production had grown so large BILLION DOLLARS BILLION DOLLARS in absolute amount and was account- 100 100 ing for such & large proportion of the nation's output that the in- 90 90 crease of nondefense production was Defense retarded; in the third quarter of 1941 the value of nondefense produc- 80 80 tion showed a decline which is con- tinuing during the current quarter. 70 70 Total national output di was proceeding at an annual rate of $80 billion during the third quarter of 60 60 1940 when the defense program was being organized. About $75 billion, or 94 percent, of this was repre- 50 50 sented by nondefense production with Nondefense only six percent devoted to defense output, as Chart 1 shows. b By the 40 40 first quarter of 1941, total output on an annual basis had risen to $92 30 30 billion, defense production had risen to $10 billion, and nondefense production had reached $82 billion. 20 20 The value of nondefense production about held its own in the second, but showed a decline during the 10 10 third quarter of 1941. Nondefense production on an o o annual basis during the current 1st 2nd 3rd 4th 1st 2nd 3rd 4th quarter of 1941 stands at about $77 1940 1941 billion. The current rate of de- fense production, $22 billion, con- DECEMBER 5, 1941 CONFIDENTIAL ... 7 8 ... CONFIDENTIAL NUMBER 64 stitutes 22 percent of the value of going into national defense. The the national output. The current peak in nondefense construction, annual rate of nondefense production $6.8 billion, was reached during the alone is still almost as high as last quarter of 1940. There was a total production in 1939. On a per reduction in nondefense construction capita basis, the annual rate is during the first quarter of 1941 higher than that for most of the when the annual rate declined to years during the preceding decade, $6.4 billion. The latter level was even after allowance is made for maintained until the present quarter price increases. when & further decline is indicated. Manufacturing constitutes an The estimated $16 billion which important segment, currently nearly is being expended for defense prod- 30 percent, of the national output. uction during calendar year 1941 In defense production it is even constitutes about 16 percent of the more important, contributing about value of national production. This half of the total at the present time. As indicated by Chart 2 b CHART 2- DEFENSE AND some 35 percent of the net value NONDEFENSE MANUFACTURES product of manufacturing is being NET VALUE PRODUCTS devoted to defense in the current ANNUAL RATES BY QUARTERS quarter. BILLION DOLLARS BILLION DOLLARS 30 30 From the third quarter of 1940 to the third quarter of 1941 net Defense value of manufacturing product ex- 20 20 panded from an annual rate of $21 to an annual rate of $29 billion, with a further increase to about $30 bil- Nondefense 10 10 lion in the current quarter. Man- ufacturing for defense during the corresponding periods increased on o 0 an annual rate from about $2 bil- Ist 2nd 3rd 4th list 2nd 3rd 4th lion to approximately $8 billion, 1940 1941 and a further increase to about $10 billion is indicated for the current CHART 3- DEFENSE AND quarter. The peak value of nonde- NONDEFENSE CONSTRUCTION fense manufacturing, some $22 bil- lion was reached in the second quar- ANNUAL RATES BY QUARTERS ter of 1941 but has since shown a substantial decline. BILLION DOLLARS BILLION DOLLARS 20 20 Construction constitutes an- other important segment of national Defense defense production. Chart 3 b indi- 10 10 cates that 44 percent of the value of total construction 18 currently Nondefense o o 1st 2nd 3rd 4th lst 2nd 3rd 4th 1940 1941 8 ... CONFIDENTIAL DECEMBER 5, 1941 NUMBER 64 CONFIDENTIAL 9 will be approximately doubled in The quarterly estimates of total 1942 under the present program. To- defense production are based on tal current expenditure including data for defense expenditures and nonindustrial items now approximate deliveries. In estimating the net 20 percent of current national out- manufacturing production going to put. If this rate should be doubl- defense, the major categories of ed by the end of 1942 it will fall defense materiel and supplies were short of the approximately 50 per- analyzed according to value con- cent of national output which Eng- tributed by manufacturing, mining, land devotes to military require- agriculture, transportation, and ments and the estimated 60 percent other industries. Estimates of or more so devoted by Germany. the manufacturing contribution to the total value of the defense product at the various industrial a "Total national output" as used in stages were cumulated to give the this article is equivalent to final estimates here used. For national income. It is not to be example, to the value contributed confused with "gross national pro- by manufacturing in the building duct" which includes the amounts of planes was added the manufac- necessary to provide for deprecia- turing content in the value of tion and maintenance of capital. materials and services. The fig- The national income estimates on ures of total construction are which this article is based in- baseu on the estimates of the clude corporate income taxes and United States Department of Com- largely for this reason differs merce; the figures for defense from the figures on total income construction are estimates of the payments carried in Defense Prog- value of defense construction in ress Series. place. DECEMBER 5, 1941 CONFIDENTIAL 9 NUMBER 64 CONFIDENTIAL IO DEFENSE ASPECTS OF THE TRADE AGREEMENT WITH ARGENTINA THE RECENT TRADE AGREEMENT BETWEEN THE UNITED STATES AND ARGENTINA, MADE POSSIBLE BY THE WAR EMERGENCY, WILL AID THE DEFENSE PROGRAM BY FACILITATING THE IMPORT OF STRATEGIC AND CRITICAL MATERIALS, IMPROVE ECONOMIC CONDITIONS IN ARGENTINA, AND PROMOTE HEMISPHERE SOLI- DARITY. T he Trade Agreement between the Argentine products valued at $62 United States and Argentina, million, or 76 percent of that coun- which went into effect November try's shipments to the United States 15, 1941 is one of the most impor- in 1940. Important among the trade tant steps yet taken in the program gains to the United States was the of cooperation between the democra- more favorable quota and exchange cies of the Western Hemisphere. This treatment to be accorded by Argen- is the only Trade Agreement negoti- tina to numerous United States ex- ated by the United States thus far ports. during World War II. The war, which seriously strained the economy of Most of the commodities on Argentina, was & strong influence on which the United States granted con- the signing of the agreement. cessions in the agreement are not produced domestically in sufficient The reciprocal concessions and quantities to meet normal require- other provisions of the agreement ments. Some of these are now highly will strengthen the defenses of the essential to our defense program. United States, Argentina, and other American countries: (1) by facili- The accompanying table shows tating increased importation of the reductions in duty and imports materials required by the defense of the principal defense materials program of the United States; (2) by coming from Argentina during 1940. improving the markets for Argentine products; and (3) by promoting bet- The curtailment of exports to ter political relations between the Europe, as a result of the war, has United States, Argentina, and other been a matter of serious concern to Latin American countries. Argentina. A sharp expansion in United States imports from Argentina, By the agreement Argentina largely of commodities required in grants tariff concessions on 127 the defense program, and a decline categories of United States goods, in United States exports, resulted which represent $32 million, or 30 in a United States import balance percent of total United States ex- amounting to $59 million during the ports to Argentina in 1940. The second 12 months of the war, ending United States grants concessions on August 1941. This balance has al- DECEMBER 5, 1941 CONFIDENTIAL 10 Il CONFIDENTIAL NUMBER 64 ready helped to strengthen the econ- merous products to that country. omy of Argentina. The reductions in United States tariffs under the A significant contribution made Trade Agreement should facilitate by the Trade Agreement is the promo- additional purchases of Argentine tion of better relations between the products by the United States, thus two countries and a greater solidar- further alleviating the strain ity in the entire Western Hemisphere, placed upon the Argentine economy by particularly in view of the long the war. Tariff reductions and misunderstanding between the United other concessions granted by Argen- States and Argentina and the politi- tina on United States products cal influence of the Axis Powers in should facilitate the sale of nu- Latin American countries. TARIFF RATES AND 1940 IMPORTS OF DEFENSE MATERIALS FROM ARGENTINA 1940 U. S. Imports AD VALOREM DUTY From Argentina Before Under Percent of Import Groups Agreement Agreement Amount U.S. total (Percent) (Million (Percent) dollars) Cattle Hides 10 5 10.6 53 Canned Beef 60 30 3.7 54 Casein 98 49 1.1 88 Carpet Wool Free Bound 14.3 46 Free Clothing, Wool 88-90 48-53 4.4 68 Flaxseed 57 43 11.7 83 Quebracho Extract 15 72 2.9 74 II CONFIDENTIAL DECEMBER 5, 1941 NUMBER 64 CONFIDENTIAL 12 THE JOINT ECONOMIC COMMITTEES OF CANADA AND THE UNITED STATES THE UNITED STATES AND CANADA ARE LAYING THE FOUNDATION FOR WHAT MAY BECOME PERMANENT ECON- OMIC COLLABORATION THROUGH COOPERATION, IN DEFENSE EFFORTS. THE COLLABORATION IS BEING 14- PLEMENTED BY THE JOINT ECONOMIC AND OTHER COMMITTEES OPERATING IN THE FIELDS OF COMMON DE- FENSE PROBLEMS. he United States and Canada are T tries in the production of defense laying the foundation for what requirements (to the extent that may become permanent economic this is not now being done), and (2) collaboration through cooperation in reducing the probable post-war eco- their defense efforts. Existing co- nomic dislocation consequent upon operation is evidenced by informal the changes which the economy in relations between the central banks; each country is presently under- by reciprocal trade agreements; and going." by large scale interchange of goods, capital investment, and industrial The United States Committee and ownership. Collaboration between the Canadian Committee of the Joint the two countries is now being fur- Economic Committees, composed of ther implemented by the operation of civil servants in various government several Joint Committees originating departments in the two countries, in the parallel defense activities. act in an advisory capacity and pre- pare recommendations in the form of On November 5, B. Joint Defense resolutions which are transmitted to Production Committee between the the Prime Minister of Canada and the United States and Canada was estab- President of the United States for lished "to coordinate the capacities action. Three meetings have been of the two countries for the produc- held since the inception of the Com- tion of defense materiel ..." This mittees, which were largely devoted Committee was established by the two to organization of the work, al- governments on the recommendation of though resolutions were passed the Joint Economic Committees. calling for further coordination of export control, shipping arrange- The Joint Economic Committees ments, defense production, and for of Canada and the United States were diminution in impediments to travel created by an exchange of notes be- between the two countries. In tween the two governments on June addition to formal resolutions, how- 17, 1941 "to study and to report to ever, the Committees have had their respective governments on the occasion from time to time to take possibilities of (1) effecting a informal steps to bring authorities more economic, more efficient, and in the two countries together and to more coordinated utilization of the acquaint governmental officials with combined resources of the two coun- their tentative conclusions on spe- DECEMBER 5, 1941 CONFIDENTIAL 12 13 CONFIDENTIAL NUMBER 64 cific problems of economic collabor- Advisory Committee, which appointed ation through letters from the re- a liaison officer to inform United spective chairmen, direct contact, States export control authorities circulation of excerpts from their and obtain from them information not minutes, etc. only on the commodities subject to control, but on the severity with In addition to the new Joint which controls in various commodi- Defense Production Committee and the ties were administered. The need Joint Economic Committees, the gov- for closer collaboration in shipping ernmental machinery for the direct matters arose after Canada, which exchange of views between officials transferred all but one of its ships in Canada and the United States in- to the North Atlantic run, asked for cludes the Permanent Joint Defense shipping space on American lines. Board, established in August 1940, Joint staff work became necessary to which deals with strategic and mili- determine the relative urgency of tary matters; and the Joint Materi- various Canadian and United States als Coordinating Committee, estab- shipping requests. A Shipping Pri- lished en May 1, 1941, to collect orities Committee was set up in Can- and exchange information on raw ma- ada to determine inland and ocean terial supplies in the United States shipping priorities, to decide upon and Canada, and to undertake negoti- the relative urgency of requests, ations leading to the sale and pur- and to furnish appropriate United chase of these supplies, their ca- States officials with information to pacity expansion, restriction in enable them to judge Canadian re- civilian use, transportation, etc. quests for space in the light of Interlocking members of the Joint United States needs. Economic Committees and of the Joint Materials Coordinating Committee The Committees have under study constitute liaison between these a variety of other defense problems: committees. The theoretical demar- the Canadian deficiency of United cation of function between the Mate- States dollar exchange and the asso- rials Coordinating and the Economic ciated transactions under the Hyde Committees is that the former deals Park Declaration of April 20, 1941, with specific problems and the lat- the desirability of Canadian re- ter is advisory over a broader range sources being devoted to the produc- of considerations. tion of exchange exports of a nonde- A resolution on export control fense character, the possibility of was prepared by the Joint Economic overcoming tariff impediments to the Committees to remedy an obyious lack economic movement of defense goods of coordination which had resulted from Canada to the United States, in foreigners taking advantage of the relative severity of the prior- differences between Canadian export ity and civilian restriction pro- control regulations and similar re- grams in both countries upon nonde- strictions in the United States. The fense civilian consumption, etc. problem was solved by the appoint- Numerous factors affecting the ment in Canada of an Export Control relation of the two economies to 13 CONFIDENTIAL DECEMBER 5, 1941 NUMBER 64 CONFIDENTIAL ... 14 Europe during the war are under ter. Recommendations of a conclu- study. The Joint Economic Commit- sive character cannot be formulated tees' planning for the post-defense until the conditions under which period has been, and may be expected Europe will conduct trade with extra for some time to be, confined to European countries in the post- memoranda of an exploratory charac- defense period can be more clearly foreseen. DECEMBER 5, 1941 CONFIDENTIAL 14 NUMBER 64 CONFIDENTIAL I DEFENSE PROGRESS SERIES The Yellow Section As new information becomes &- vailable, graphs are included to illustrate the index data. The n its Yellow Section, Defense Pro- gress each week presents the most current issue includes such & recent confidential information on graph showing the ammunition the progress of the defense program. production indexes since the be- It is divided into four main parts: ginning of the program. 1. A detailed statement of the 3. The Yellow Section records, from latest financial data on the time to time, "Other Defense In- defense program together with dicators" as they become avail- comparative data to the end of able. the previous month, and the first full year of the defense 4. The Yellow Section also includes effort. data on economic activity relat- ed to defense which, because of The financial table begins with their confidential nature, are a statement of total defense not included in the Pink Section, financial program to date, and the part of it that is United 5. The Pink Section contains data States financed. This total is on economic activity related to defense. The series is not con- then broken down for analysis; fidential and is included for first, according to defense cb- the convenience of readers of jects; second, according to de- fense agencies. Defense Progress. The financial program is repeat- Ammunition Production In October ed and brought up to date in each issue of Defense Progress The weighted index A of monthly for current information. production of ammunition reached 22 in October. This represented a two 2. Also appearing in each issue is point increase over the previous the table of physical production high of 20 recorded in September, indexes for major types of de- but was only about one-third as high fense equipment month by month, as it should have been on the basis showing both production cumu- of the schedules established on Au- lated to date and monthly prod- gust 1, 1941. uction rates in contrast with the indexes of previously estab- A sizeable gain in the output lished schedules. The table is of aircraft cannon ammunition was arranged so that it is possible the principal influence making for to see at a glance the exact the rise in the index. Production rate of progress in each of the of small arms and antiaircraft am- defense categories, as well as munition increased slightly. There its relation to what was expect- was a drop in the output of field ed at the outset of the program. artillery shells. DECEMBER 5, 1941 CONFIDENTIAL I NUMBER 64 CONFIDENTIAL II As may be seen from the chart Wholesale Prices on page VIII, the index of total cu- mulated production at the end of Oc- The BLS price indexes of stra- tober stood at 17 in comparison with tegic and critical materials, 2° financed production requirements of basic commodities, and all communi- 393. Almost 70 percent of require- ties increased from August 1940 to ments (258 points in the index) had October 1941, as the chart on page been ordered as of October 31. IX indicates. The greatest increase occurred in basic commodities which Pending Legislation rose 47 points. Prices leveled off The Third Supplemental National during the last three weeks in Nov- Defense Appropriation Bill, 1942, ember. reported to the House of Representa- tives on December 3, includes $7,743 million for national defense activ- ities. Of this total, $5,136 million 1 The individual items included in is for the War Department, $1,556 the indexes of production are million for Defense Aid, 830 mil- weightei to indicate their rela- lion for the Navy Department, and tive importance. The production $221 million for other agencies. If rate index measures output during passed, this bill would bring the the month, with average scheduled total United States defense program monthly production during fiscal to $72,226 million. year 1942 taken as 100 percent. The total production index meas- National Income ures cumulated production since the start of the program, with The annual rate of total income scheduled total output during fis- payments rose to $95.5 billion in cal year 1942 equivalent to 100 October, about $20 billion above the percent. Output during 1942 is level at the outset of the defense currently based upon schedules as program in July 1940. of August 1, 1941. DECEMBER 5, 1941 CONFIDENTIAL II FOOTNOTES DEFENSE PROGRESS SERIES See Opposite Page Data on obligations and unobligated balances are tentative pending determination of reserves not available for immediate obligation. n.a. Not Available F.Revised P Preliminary a Total defense program includes all funds and authorisations made available for defense purposes by the United States Government plus foreign orders placed in this country since November 1939. The major portion of the ex- isting program has been approved since June 11, 1940, but some authoriza- tions (particularly pdrtions of the naval expansion program, the merchant shipbuilding program, and the stockpile program) were made available even earlier. All funds are shown during the fiscal year in which they are a- vailable for obligation. b United States financed program includes the defense activities of all United States Government agencies (including Defense Aid) plus the defense activities of government owned corporations, but does not include foreign orders. c United States Treasury General Fund includes the defense activities of all United States Government agencies (including Defense Aid). It does not include the activities of government owned corporations or foreign orders in the United States. d Checks paid include (1) all checks paid out of the Treasury General Fund (cf. footnote % (2) checks issued by the Reconstruction Finance Corpora- tion and subsidiary Government corporations; (3) checks issued by foreign purchasing commissions. e Value delivered and/or in place includes (1) value delivered and/or in place for ships and value of production for other munitions, (2) value in place 1 for defense construction, and (3) checks issued by finance officers for non- munitions items. f Program and obligations for pay for civilians and for the Navy include only that specifically mentioned in appropriation bills, while the cash disburse- ment figures include, in addition, executive defense pay which cannot be separately distinguished in the appropriation bills. E Report on checks paid by the Treasury for the account of the Maritime Com- mission makes allowance for receipts credited to the Construction Loan Fund. NUMBER 64 CONFIDENTIAL III DEFENSE PROGRESS SERIES TOTAL UNITED STATES DEFENSE PROGRAM Cumulative 6/11/40 through Monthly End lst End of Let halfof October October, September October full year November, 6/30/41 1940 1941 1941 1941 1941 FINANCIAL PROGRAM (Million dollars) TOTAL DEFENSE PROGRAM IN U.S.ᵃ Program 41,131 58,252 68,252 2,653 650 6,135 Unobligated balance 9,289 18,535 n.a. - - - Obligations 31,842 49,717 n.a. 2,359 4,113 P 5,486 Value delivered and/or in place 8,697 15,707 n.a. 385 1,982 P 2,285 Checks paid di 8,503 14,129 14,997 491 1,498 1,706 U. S. FINANCED PROGRAM D Program 37,446 64,483 64,483 2,115 631 6,135 Unobligated balance 9,289 18,535 n.a. - - - Obligations 28,157 45,948 n.a. 1,821 4,289 5,486 Checks paid di 6,430 11,721 12,549 312 1,423 1,626 TREASURY GENERAL FUND ONLY c Program 34,638 60,156 60,156 1,803 174 5,761 Unobligated balance 7,817 17,301 n.a. - - - Obligations 26,821 42,855 n.a. n.a. 3,949 P 5,437 Checks paid by U.S. Treasury 6,080 11,010 11,773 297 1,319 1,526 OBJECTS MUNITIONS PROD.&DEFENSE CONSTR, Program 36,671 57,120 57,120 1,862 303 3,676 Unobligated balance 7,143 12,315 n.a. - - - Obligations 29,528 44,805 n.a. 2,354 3,398 P 5,027 Value delivered and/or in place c 6,941 12,519 n.a. 270 1,581 1,811 Value not delivered and/or in place 22,587 32,286 n.s. - - - MUNITIONS PRODUCTION, TOTAL Program 28,024 44,181 44,181 1,192 198 3,298 Unobligated balance 4,491 9,347 n.e. - - - Obligations 23,533 34,834 n.a. 1,801 2,858 P 4,088 Value delivered and/or in place e 4,436 8,124 n.a. 185 1,061 1,356 Value not delivered and/or in place 19,097 26,710 n.a. - - - Table continued on following page. For footnotes see opposite page. DECEMBER 5, 1941 CONFIDENTIAL Ell FOOTNOTES DEFENSE PROGRESS SERIES Spe Opposite Page Data on obligations and unobligated balances are tentative pending determination of reserves not available for immediate obligation. n.a. Not Available F.Revised P Preliminary & Total defense program includes all funds and authorizations made available for defense purposes by the United States Government plus foreign orders placed in this country since November 1939. The major portion of the ex- isting program has been approved since June 11, 1940, but some authorise- tions (particularly portions of the naval expansion program, the merchant shipbuilding program, and the stockpile program) were made available STAC earlier. All funds are shown during the fiscal year in which they are - vailable for obligation. b United States financed program 1 includes the defense activities of all United States Government agencies (including Defense A1d) plus the defense activities of government owned corporations, but does not include foreign orders. e United States Treasury General Fund includes the defense activities of all United States Government agencies (including Defense Aid). It does not include the activities of government owned corporations or foreign orders in the United States. 4 Checks paid include (1) all checks paid out of the Treasury General Fund (of. footnote % (2) checks issued by the Reconstruction Finance Corpora- tion and subsidiary Government corporations; (3) checks issued by foreign purchasing commissions. e Value delivered and/or in place includes (1) value delivered and/or in place for ships and value of production for other munitions, (2) value in place for defense construction, and (3) checks issued by finance officers for non- munitions items. f Program and obligations for pay for civilians and for the Navy include only that specifically mentioned in appropriation bills, while the cash disburse- sent figures include, in addition, executive defense pay which cannot be separately distinguished in the appropriation bills. E Report on checks paid by the Treasury for the account of the Maritime Com- mission makes allowance for receipts credited to the Construction Loan Fund. NUMBER 64 CONFIDENTIAL IV DEFENSE PROGRESS SERIES TOTAL UNITED STATES DEFENSE PROGRAM Cumulative 6/11/40 through Monthly End 1st End of let halfof October full year October, September October November, 1941 1941 1940 1941 1941 6/30/41 (Million dollars) MUNITIONS PROD. (CONT'D.) AIRPLANES, PARTS& ACCESSORIES Program 8,481 13,174 13,174 397 1 655 Obligations 7,281 11,044 n.a. 809 818 P 1,385 Value delivered 1,010 1,770 n.a. 30 195 250 ORDNANCE Program 7,780 13,330 13,330 199 -126 1,553 Obligations 5,418 9,921 n.a. 359 1,323 P 2,412 Value delivered 700 1,280 n.a. 30 180 175 NAVAL SHIPS Program 6,654 8,235 8,235 21 311 110 Obligations 6,422 7,506 7,521 191 232 P 74 Value delivered and/or in place 956 2,389 n.s. 35 451 661 MERCHANT SHIPS Program 1,766 3,805 3,805 10 o 857 Obligations 1,514 2,251 n.a. 16 222 P 132 Value delivered and/or in place 190 320 n.s. 10 35 50 OTHER MUNITIONS AND SUPPLIES Program 3,343 5,637 5,637 565 12 123 Obligations 2,898 4,112 n.a. 426 263 P 85 Value delivered 1,580 2,365 n.a. 80 200 220 DEFENSE CONSTRUCTION, TOTAL Program 8,647 12,939 12,939 570 105 378 nobligated balance 2,652 2,968 n.a. - - - Obligations 5,995 9,971 n.a. 553 540 P 939 Value in place 2,505 4,395 n.a. 85 520 455 Value not in place 3,490 5,576 n.s. - - - INDUSTRIAL FACILITIES Program 5,305 7,826 7,826 322 95 381 Obligations 3,056 5,612 n.a. 360 282 & 506 Value in place 960 1,960 n.a. 30 285 250 Table continued on following page. For footnotes see opposite page. DECEMBER 5, 1941 CONFIDENTIAL IV FOOTNOTES DEFENSE PROGRESS SERIES See Opposite Page Data on obligations and unobligated balances are tentative pending determination of reserves not available for immediate obligation. n.a. Not Available F.Revised P Preliminary & Total defense program includes all funds and authorisations made available for defense purposes by the United States Government plus foreign orders placed in this country since November 1939. The major portion of the EX- isting program has been approved since June 11, 1940, but some authorise- tions (particularly portions of the naval expansion program, the merchant shipbuilding program, and the stockpile program) were made available even earlier. All funds are shown during the fiscal year in which they are - vailable for obligation. b United States financed program includes the defense activities of all United States Government agencies (including Defense A14) plus the defense activities of government owned corporations, but does not include foreign orders. e United States Treasury General Fund includes the defense activities of all United States Government agencies (including Defense A1d). It does not include the activities of government owned corporations or foreign orders in the United States. 4 Checks paid include (1) all checks paid out of the Treasury General Fund (of. footnote % (2) checks issued by the Reconstruction Finance Corpora- tion and subsidiary Government corporations; (3) checks issued by foreign purchasing commissions. . Value delivered and/or in place includes (1) value delivered and/or in place for ships and value of production for other munitions, (2) value in place for defense construction, and (3) checks issued by finance officers for non- munitions items. f Program and obligations for pay for civilians and for the Havy include only that specifically mentioned in appropriation bills, while the cash disburse- ment figures include, in addition, executive defense pay which cannot be separately distinguished in the appropriation bills. E Report on checks paid by the Treasury for the account of the Maritime Com- mission makes allowance for receipts credited to the Construction Loan Fund. NUMBER 64 CONFIDENTIAL V DEFENSE PROGRESS SERIES TOTAL UNITED STATES DEFENSE PROGRAM Cumulative 6/11/40 through Monthly End lst End of Let half of full year October, November, October, September October 6/30/41 1941 1941 1940 1941 1941 (Million dollars) DEFENSE CONSTRUCTION (CONT'D.) POSTS, DEPOTS, STATIONS Program 2,850 4,471 4,471 98 10 -3 Obligations 2,664 3,950 n.a. 158 214 P 392 Value in place 1,430 2,165 n.a. 55 200 150 HOUSING, NON-MILITARY Program 492 642 642 150 o o Obligations 275 409 421 35 44 P 41 Value in place 115 270 n.a. 0 35 35 NON-MUNITIONS ITEMS, TOTAL Program 4,460 11,132 11,132 791 347 2,459 Unobligated balance 2,148 6,220 n.a. - - - Obligations 2,312 4,912 n.a. 5 715 P 459 Checks issued by agencies 1,756 3,188 n.a. 115 401 P 474 STOCKPILE Program 983 1,631 1,631 102 368 o Obligations 470 910 n.a. 23 251 P 55 Checks issued by agencies 192 P 365 n.a. 11 55 70 AGRICULTURAL & MISC. EXPORTS (DEFENSE AID) Program 1,250 3,043 3,043 - o 1,949 Obligations 109 790 n.a. - 214 P 148 Checks issued by agencies 5 P 248 n.a. - 81 119 PAY, SUBSISTENCE & TRAVEL f Army Military Program 944 2,563 2,563 505 o o Obligations 934 1,684 n.s. 52 167 P 146 Checks issued 388 P 562 n.s. 39 44 50 Navy Military Program 376 804 804 2 0 0 Obligations 334 490 n.a. 29 44 P 29 Checks issued 696 P 1,205 n.a. 37 130 141 Civilian Payroll Program 32 170 170 28 o 16 Obligations 103 117 n.a. 3 4 P 4 Checks issued 356 P 558 n.s. 23 51 54 Table continued on following page. For footnotes see opposite page. DECEMBER 5, 1941 CONFIDENTIAL V FOOTNOTES DEFENSE PROGRESS SERIES See Opposite Page Data on obligations and unobligated balances are tentative pending determination of reserves not available for immediate obligation. n.a. Not Available F.Revised P Preliminary a Total defense program includes all funds and authorisations made available for defense purposes by the United States Government plus foreign orders placed in this country since November 1939. The major portion of the ax- isting program has been approved since June 11, 1940, but some authorisa- tions (particularly pdrtions of the naval expansion program, the merchant shipbuilding program, and the stockpile program) were made available STED earlier. All funds are shown during the fiscal year in which they 679 - vailable for obligation. b United States financed program 1 soludes the defense activities of all United States Government agencies (including Defense A1d) plus the defense activities of government owned corporations, but does not include foreign orders. o United States Treasury General Fund includes the defense activities of all United States Government agencies (including Defense A14). It does not include the activities of government owned corporations or foreign orders in the United States. d. Checks paid include (1) all checks paid out of the Treasury General Fund (of. footnote % (2) checks issued by the Reconstruction Finance Corpora- tion and subsidiary Government corporations; (3) checks issued by foreign purchasing commissions. . Value delivered and/or in place includes (1) value delivered and/or in place for ships and value of production for other munitions, (2) value in place for defense construction, and (3) checks issued by finance officers for non- munitions items. f Program and obligations for pay for civilians and for the Havy include only that specifically mentioned in appropriation bills, while the cash disburse- ment figures include, in addition, executive defense pay which cannot be separately distinguished in the appropriation bills. E Report on checks paid by the Treasury for the account of the Maritime Com- mission makes allamance for receipts credited to the Construction Lean Fund. NUMBER 64 CONFIDENTIAL VI DEFENSE PROGRESS SERIES TOTAL UNITED STATES DEFENSE PROGRAM Oumulative 6/11/40 through Monthly End 1st End of lethalf of October, September October full year October, November, 1940 1941 1941 6/30/41 1941 1941 (Million dollars) NON-MUNITIONS ITEMS (CONT'D.) MISCELLANEOUS NON-MUNITIONS Program 875 2,921 2,921 154 -21 494 Obligations 362 921 n.a. -102 35 P 77 Checks issued by.agencies 119 P 250 n.a. 5 a 40 P 40 AGENCIES U. S. ARMY Program 13,135 24,606 24,606 1,377 o 0 Obligations 11,404 20,598 n.a. n.a. 2,141 P 1,379 Checks paid by S.Treasury 3,636 6,209 6,590 134 700 P 785 U. S. NAVY Program 12,308 17,627 17,627 85 174 113 Obligations 11,225 14,681 14,859 - 868 P 569 Checks paid by U.S.Treasury 2,217 3,791 4,017 150 377 P 442 DEFENSE AID Program 7,000 12,985 12,985 - o 5,985 Allocations 5,177 6,784 n.a. - 175 315 Obligations 2,458 4,826 n.a. - 778 365 Checks paid by U.S. Treasury 21 456 559 - 140 A 192 U. S. MARITIME COMMISSION Program 969 2,668 2,668 o o -2 Obligations 886 1,635 n.a. - 118 B 232 Checks paid by U.S. Treasury (net) g 44 94 109 10 26 & 21 R. F. C. & SUBSIDIARIES Program 2,808 4,327 4,327 212 457 o Obligations 1,336 3,093 n,a, - 340 P 147 Checks issued by R. F. C. 350 711 P 776 15 104 P 100 OTHER U. S. AGENCIES Program 1,226 2,270 2,270 341 o 39 Obligations 848 1,115 n.s. - 44 P 55 Checks paid by Treasury 162 460 498 3 76 P 86 Table continued on following page, For footnotes see opposite page. DECEMBER 5, 1941 CONFIDENTIAL VI FOOTNOTES DEFENSE PROGRESS SERIES See Opposite Page Data on obligations and unobligated balances are tentative pending determination of reserves not available for immediate obligation. n.a. Not Available F.Revised P Preliminary & Total defense program includes all funds and authorizations made available for defense purposes by the United States Government plus foreign orders placed in this country since November 1939. The major portion of the ex- isting program has been approved since June 11, 1940, but some authorisa- tions (particularly portions of the naval expansion program, the merchant shipbuilding program, and the stockpile program) were made available even earlier. All funds are shown during the fiscal year in which they 670 - vailable for obligation. b United States financed program 1 cludes the defense activities of all United States Government agencies (including Defense Aid) plus the defense activities of government owned corporations, but does not include foreign orders. c United States Treasury General Fund includes the defense activities of all United States Government agencies (including Defense Aid). It does not include the activities of government owned corporations or foreign orders in the United States. d Checks paid include (1) all checks paid out of the Treasury General Fund (of. footnote % (2) checks issued by the Reconstruction Finance Corpora- tion and subsidiary Government corporations; (3) checks issued by foreign purchasing commissions. e Value delivered and/or in place includes (1) value delivered and/or in place for ships and value of production for other munitions, (2) value in place for defense construction, and (3) checks issued by finance officers for non- munitions items. 1 Program and obligations for pay for civilians and for the Navy include only that specifically mentioned in appropriation bills, while the cash disburse- ment figures include, in addition, executive defense pay which cannot be separately distinguished in the appropriation bills. 4 Report on checks paid by the Treasury for the account of the Maritime Com- mission makes allemenos for-receipts credited to the Construction Lean Fund. NUMBER 64 CONFIDENTIAL VII DEFENSE PROGRESS SERIES TOTAL UNITED STATES DEFENSE PROGRAM Cumulative 6/11/40 through Monthly End let End of Lethalf of full year October, November, October, September October 6/30/41 1940 1941 1941 1941 1941 (Million dollars) FOREIGN ORDERS Program (orders) 3,685 3,769 3,769 538 19 0 Obligations 3,685 3,769 3,769 538 19 o Checks issued by Purchasing Missions 2,073 2,408 2,448 179 75 P 80 OTHER DEFENSE INDICATORS VALUE OF FACIL. ON APPLIC. FOR CERT. OF NECESSITY (Million dollars) Total 1,424 n.s. n.a. - 199 n.a. Approved, private funds 829 n.a. n.a. - 52 n.a. Approved, public funds 201 n.s. n.a. - 8 n.a. Disapproved 7 n.a. n.a. - 2 n.a. Pending 387 n.a. n.a. - 137 n.a. DEFENSE HOUSING (Number of dwelling units) Fund allocations 110,298 141,522 141,522 4,250 11,440 4,692 Cons. contracts awarded 78,820 115,141 119,451 10,469 8,178 11,970 Construction completed 21,768 54,884 59,861 0 6,546 9,300 ECONOMIC ACTIVITY RELATED TO DEFENSE 1940 1941 July January September October (Thousand workers) DEFENSE EMPLOYMENT Private, 18 major indus, 1,660 2,038 T 2,671 2,731 Private, controts. pub.constri 13 448 435 n.a. Public 117 171 234 n.a. Total direct defense 1,790 2,657 3,329 n.a. I' Revised data, P Preliminary. n.a. Data not Available. DECEMBER 5, 1941 CONFIDENTIAL ... VII VIII CONFIDENTIAL NUMBER 64 CHART 1 - AMMUNITION INDEX OF CUMULATIVE TOTAL PRODUCTION (PRODUCTION, F.Y. 1942-100) 500 500 400 393 400 Foreign Orders Defense Aid 300 300 258 200 Army 200 and Navy By This Time We Should Produce 112 100 100 TO THE END OF OCTOBER We Expected Aug I, 1941 to Produce Schedule Actual 22 17 o We Produced 17, o M J J A S o N D J F M A M J Financed Ordered Produced 1941 1942 Production Requirements As of Oct. 31, 1941 INDEX OF PRODUCTION DURING MONTH (AVGE. MONTHLY PRODUCTION, F.Y. 1942=100) 200 200 Schedule 150 150 Actual 100 DURING OCTOBER IOO We Expected to Produce 61 50 50 We Produced 22 o o M J J A S o N DI J F M A M J 1941 1942 VIII. : . CONFIDENTIAL DECEMBER 5, 1941 NUMBER 64 CONFIDENTIAL IX DEFENSE PROGRESS SERIES DEFENSE EQUIPMENT INDEXES Major Com- Combat Airplanes Army-type Ammunition bat Ships Vehicles Guns SCHED. ACTUAL SCHED. ACTUAL SCHED. ACTUAL SCHED. ACTUAL SCHED. ACTUAL AS OF AS OF AS or AS OF AS OF OCT. 1 AUG. 1 Nov. 1 8/1 8/1 Average monthly production FY 1942=100 MONTHLY PRODUCTION RATE DURING 1940 July 27 16 16 & 14 lb 11 December 38 26 1941 March 44 34 10 30 June 55 45 27 41 13 September 87 62 61 64 98 67 35 20 October 71 109 80 68 83 112 84 61 22 November 28 90 85 96 au December 82 97 108 88 111 1942 January 109 109 110 100 118 February 98 120 111 146 130 March 115 126 116 117 149 June 126 139 147 111 104 Av. monthly prod. FY 1942 100 100 100 100 100 Peak month 169 (11/42) 158 (10/42) 155 (5/42) 140 (2/42) 104 (6/42) TOTAL CUMULATIVE PRODUCTION TO Total production FY 1942=100 1940 December 31 16 8 3 7 1941 March 30 27 16 5 13 90 June 30 42 27 11 22 11 September 30 55 61 42 41 25 40 38 19 15 October 31 61 70 47 46 32 50 44 22 17 November 30 69 55 39 58 29 December 31 76 63 48 65 39 1942 January 31 85 72 57 73 48 February 28 93 82 66 85 59 March 31 103 93 76 95 72 June 30 135 127 111 123 112 Total production FY 1942 100 100 100 100 100 Financed production require- ments November 1 452 311 182 265 393 Ordered to November 1 452 265 177 251 258 To be Ordered November 1 0 46 5 14 135 "Average July 1, 1940 - Dec. 31, 1940. DAverage July 1, 1940 - April 30, 1941. °April 30, 1941. DECEMBER 5, 1941 CONFIDENTIAL IX H NUMBER 64 INDÚSTRIAL PRODUCTION NATIONAL INCOME & DEFENSE EXPENDITURES TOTAL POINTS IN INDEX BILLION DOLLARS 180 100 ANNUAL RATE 160 so 140 NATIONAL INCOME PAYMENTS INDUSTRIAL PRODUCTION 120 60 100 80 40 DURABLE MANUFACTURES 60 40 20 20 DEFENSE EXPENDITURES o o J A 5 o N D J F M A M J J A S o N D J A 5 o N D J F M A M J J A $ o N o 1940 1941 1940 1941 WHOLESALE PRICES NET FEDERAL-DEBT, 1914-41 AUG. 1939 . 100 GROSS DEBT LESS BALANCE IN GENERAL FUND INDEX BILLION DOLLARS 160 60 BASIC COMMODITIES 50 140 STRATEGIC MATERIALS 40 120 30 CRITICAL MATERIALS 20 ALL COMMODITIES 100 10 80 o J A 5 o N D J F M A M , J A 5 o N D 914 20 of 30 of 40 JFMAMJ J ASOND 1940 1941 (94) END OF CALENDAR YEAR END OF MONTH x DECEMBER 5, 1941 NUMBER 64 NOT CONFIDENTIAL R DEFENSE PROGRESS SERIED ECONOMIC ACTIVITY RELATED TO DEFENSE The series on this page are included for the convenience of readers of Defense Progress. The data are not confidential And there are no restrictions upon their use through their inclusion in this confidential report. 1940 1941 July January October Week ending September Nov. 22 Nov, 29 750. RES. BD. PROD. INDEXES (Unadjusted Indexes 1935-39 . 100) Total industrial production 120 135 167 P 168 est. 166 Durable manufactures 131 166 206 P 211 213 Nondurable manufactures 111 118 145 P 143 Minerals 121 113 137 P 139 "AOR 139 137 BUR. FOR. & DOM. DOM, MFRS. (Indaxes) ORDERS, SHIPMENTS, INVENTORIES New orders, total (1/39-100) 127 176 202 P 192 Shipments, total (1/39*100) 117 148 208 P 203 Inventories, "(12/31/38-100) 109.2 120,8 137.8 P 142,6 Durable (12/31/38-100) 111,9 129,7 150.6 P 155.2 Nondurable (12/31/38-100) 106.4 111,2 124.0 P 129.0 BLS. PRICE INDEXES (Indexes) StrategioMatarials(8/39=100) 123,6 126,1 142,8 143.0 143.3 143.3 Critical Materials 8/39-100) 107,5 111,7 117.3 116,7 116,8 116,8 Basic Commodities (8/39-100) 108,5 120,5 155.6 153,1 154,6 154.9 Machine tools (8/39*100) 108.7 114.6 118.9 119,4 - # All commodities (1926-100) 77.7 80,8 91,8 92.4 92,2 92,3 (1935-39 . 100) BLS COST OF LIVING INDEX 100,3 100,8 108,1 109,4 TRANSPORTATION& ELECTRIC POWER (Averages) Freight cars Loadings (thous, per week) 706 684 885 914 799 866 Unloads for export (dly.) 1,502 1,352 1,736 1,885 1,796 1,831 Surplus, total (thous.dly.) 133 110 41 4 62 Boxoars 57 43 15 19 28 Coal care 47 42 10 11 19 Power prod. (mil,kwk,wkly.) 2,731 3,080 3,348 3,439 3,205 3,293 NATIONAL INCOME (Billion dollars, annual rate) Total income payments 75.2 81.7 93.7 p 94.9 FEDERAL DEBT (Billion dollars, end of month) Net public debt 41.5 43.9 49.1 50,9 5 52,7 EMPLOYMENT (Thousand workers) Total civil nonagricultural 35,454 36,621 40,715 P 40,749 Total WPA employment 1,655 1,890 1,037 1,040 1,058 1,060 Defense Confidential data, See Page VII Deep-sea merchant vessels 52 49 50 50 UNEMPLOYMENT (WPA ESTIMATE) (Million workers) Number of unemployed 9.3 7,6 4.5 3,91 3.9 Graph appears on opposite page. P Preliminary data, n.a. Data not available DECEMBER 5, 1941 NOT CONFIDENTIAL XI RULES FOR CUSTODY OF 'DEFENSE PROGRESS' Recipients of Defense Progress, agree to act as the custodians of all copies delivered to them and to abide by the following rules which have been adopted to aid in enforc- ing the Espionage Act: (1) Not to permit information from any copy in their custody to become available to anyone except a Government employee under their im- mediate supervision who will be bound by the restrictions hereby agreed to and who requires access to Defense Progress in connection with his official duties. (2) To keep all copies in a securely looked con- tainer when not actually in use. (3) Not to incorporate information from Defense Progress in any record unless the use of such record is restricted as if the record were it- self a copy of Defense Progress. (4) To give prior written notice of any change of address to the Bureau of Research and Statis- tics. (5) On written request from the Bureau of Research and Statistics, or before separation from the Government position which entitles them to re- ceive Defense Progress, to return all copies charged to their account. *** CONFIDENTIAL DEFENSE PROGRESS SPECIAL ARTICLES DEFENSE PROGRESS SERIES ECONOMIC DATA DEFENSE PROGRESS Office of Production Management BUREAU OF RESEARCH & STATISTICS STACY MAY, CHIEF DEFENSE PROGRESS Issued to The President Copy Number 1: This report is looned to you by the Bureou of Research and Stotistics of the Office of Production Management for official use. @ contains CONF IDENTIAL information offecting the defense of the United Stotes Revelotion of lb contents in ony manner to unouthorized persons is prohibited by the Espionage Act See inside of back page for Rules for Custody of Defense Progress DEFENSEPROGRESS BUREAU OF RESEARCH AND STATISTICS. STACY MAY, CHIEF ECONOMIC ANALYSIS BRANCH MORRIS A. COPELAND, CHIEF LESTER S. KELLOGG, ASSISTANT CHIEF & EDITOR This summary containe CORFIDENTIAL information effecting the defener of the United States. Revelation of its contente in any manner to unautherized persons is prohibited by the Explanage Act. CONFIDENTIAL NUMBER 65 DEFENSE PROGRESS DECEMBER 1941 BRIEFS OF CONTENTS Page PROCUREMENT PRACTICES MUST BE MARKEDLY IMPROVED if munitions production schedules are to be "stepped up at once" to meet the greatly in- creased requirements of the Victory Program. Recent placements of contracts have done little or nothing to step up the rate of production during the next 12 months. They have merely provided for continuing previously arranged production rates for a longer period. 1 THE JAPANESE ATTACK seriously endangers the supplies of & number of strategic and critical defense materials. Present stockpiles of most of the materials produced in the war zone are inadequate to meet expanding war needs. If military requirements are to be adequately safeguarded nondefense consumption should be reduced immediately to minimum essential uses and new supplies not urgently needed for the war effort should be added to the stockpile re- serves. 4 DEFENSE PROGRESS SERIES. November production of both military airplanes and combat vehicles, in terms of the weighted indexes, dropped below the all time highs reached by these items in October. As of November 30, the total cumulative produc- tion index for planes stood at 51 and that for combat vehicles at 43. Accession rates declined in October in the basic metal working industries but continued at & high level in the shipbuild- ing and aircraft industries. I DECEMBER 12,1941 CONFIDENTIAL NUMBER 65 CONFIDENTIAL ... I REVISIONS IN DELIVERY SCHEDULES AND ORDERS FOR MUNITIONS AUGUST 1 - NOVEMBER I, 1941 P rocurement practices must be Placing contracts for the remain- arkedly improved if munitions der of the present enacted program production schedules are to be immediately. "stepped up at once" to meet the greatly increased requirements of Appropriating funds and placing the Victory Program. Recent place- contracts for the Victory Program ments of contracts have done little as quickly 8.8 is consistent with or nothing to step up the rate of careful planning. production during the next 12 months. They have merely provided for con- Placing new contracts so as to tinuing previously arranged produc- provide for deliveries at the ear- tion rates for a longer period. It liest possible date. is necessary to "put procurement in- to highest gear at once" by: Placing new contracts so as to make full use of additional exist- Stepping up deliveries under con- ing facilities not previously tracts already placed by insuring drawn into the munitions program. full use of facilities already in munitions production. Charts 1 and 2 show new orders and changes in delivery schedules CHART RECENT CHANGES IN ORDERS AND DELIVERY SCHEDULES TO JULY 1, 1942 - Orders - - - . Per - if Tural Das - - - Decrease - Scheduled Deliveries . - HI in # - . Per Cent - Scheduled Deliveries - $ 1942 las of PER SENT DECREASE - DENT INCREASE @ o +20 *40 +50 +80 - Dange AMMUNITION - Per las Danga - - - COMBAT VEHICLES PLANES - Change ARMY TYPE GUNS MINOR NAVAL CRAFT MERCHANT SHIPS MAJOR COMBAT SHIPS - Change -10 e +20 Director +60 +80 MR - DESPEASE PER GENT INCREASE CONFIDENTIAL ... I DECEMBER 12, 1941 2 CONFIDENTIAL NUMBER 65 for the major categories of muni- tions from approximately August 1 to November 1, 1941. In terms of CHART 2 - RECENT CHANGES IN ORDERS weig ted indexes, the number of AND DELIVERY SCHEDULES TO JAN. 1, 1943 planes, guns, ammunition, and combat New Orders from Aug to Now (194) - # Per Card of Telel Orders - M and increases - Decreases - Scheduled Deliveries . as " 1943 (44 of vehicles ordered increased by per- - il " , Per Cent of Scheduled Deliveries " - (843 Ins of Ausl) centages ranging from 31 to 69 dur- PER SENT DECREASE PER DENT INCREASE DO o OF+ = ing this period. Deliveries sched- PLANES Cert Change Orders uled prior to July 1, 1942 show no - Dem Change - Delveries improvement for planes and amunition, and an increase of only five percent MINOR NAVAL CRAFT for army-type guns. There is an in- - Change crease of 12 percent in scheduled deliveries for combat vehicles. Or- MERCHANT SHIPS ders for minor naval craft increas- ed 17 percent while, scheduled del- iveries to July 1, 1942 declined MAJOR COMBAT SHIPS - Change five percent. A small increase in orders for merchant ships accompa- -20 o =80 is nied a decline in scheduled deliv- PER DENT DECREASE PER DENT INCREASE eries of four percent. In the case of these ships the principal expla- nation offered is lack of steel. It is significant that the largest in- 1, 1942; therefore, it is impossible crease in expected deliveries during to compare expected deliveries of this short-run period is to be found these items beyond that date. in the schedules for major combut ships which were stepped up 17 per- Chart 3 shows cumulated deliv- cent. eries to January 1 and July 1, 1942 of the major categories of munitions An examination of schedules under August and November schedules through another six months to Jan- as percentages of production re- uary 1, 1943, shows little improve- quirements on November 1. Under ment in the broadening of the flow. November 1 schedules we are plan- Schedules for planes, minor naval ning to produce less than half of craft, major combat ships, and mer- requirements by July 1, 1942 for all chant ships show a maximum in upward items except tanks and minor naval revision in cumulative deliveries of craft. The chart exaggerates prog- six percent. Unfortunately, the ress in scheduling requirements if August 1 scheduled deliveries of the Victory Program is taken into ordnance did not extend beyond July account. NOTE ON DATA: Schedules, orders, and requirements are computed in terms of weighted indexes as carried in defense progress series for planes, guns, ammu- nition, and combat vehicles; tons of standary displacement for major com- bat ships; deadweight tons for merchant ships; and total number of vessels of all types for minor naval craft. For airplanes OPM schedules 8-F (July 1941) and 8-G (November 1941) are compared; for merchant vessels September 1 and November 1 schedules are compared. 2 CONFIDENTIAL DECEMBER 12, 1941 NUMBER 65 CONFIDENTIAL ... 3 CHART 3 - REVISIONS IN DELIVERY SCHEDULES AND PRODUCTION REQUIREMENTS FOR MUNITIONS CUMULATIVE INDEXES SCHEDULE AS OF 19.4 39.2 62.2 95.1 July I PLANES By Jon. 1,42 By July 1,42 By Jon.1,43 Total Requirements Nov. I 200 39.3 66.0 100 AS OF 23.7 448 97.4 Aug I GUNS By Jon.1, 42 By July 1,42 By Jon.1,43 Total Requirements Nov. I 21.9 469 728 IOO AS OF 8.8 25.5 87.4 Aug. I AMMUNI- By Janj 42 By Julyl, 42 By Jon. 1, 43 Total Requirements TION Nov. I 6.0 25.5 62.2 100 AS OF 27.0 52.1 99.6 Aug I COMBAT By Jon.1,42 By July 1, 42 By Jon.1, 43 Total Requirements VEHICLES Nov. I 25.0 58.3 94.6 100 AS OF 38.0 57.0 62.0 75.0 MINOR Aug. I NAVAL By Jon.1, 42 By July 4 42 By Jon.1,43 Total Requirements CRAFT Nov. I 330 540 620 100 AS OF 7.2 10.0 210 100 MAJOR Aug I COMBAT By Jon.1,42 By July 1,42 By Jon 1,43 Total Requirements SHIPS Nov. I 7.0 120 22.0 100 AS OF 11.2 28.0 52.0 98.0 Aug. I MERCHANT By Jan 1,42 By July 42 By Jan.1, 43 Total Requirements VESSELS Nov. I 10.8 27.0 49.0 100 DECEMBER 12, 1941 CONFIDENTIAL 3 NUMBER 65 CONFIDENTIAL ... 4 EFFECT OF WAR IN THE PACIFIC ON SUPPLIES OF DEFENSE MATERIALS T he Japanese attack endangers area nondefense consumption should United States supplies of & num- be reduced immediately to absolutely ber of strategic and critical essential uses and all new supplies materials which are produced in the not needed for the war effort should Pacific War Zone. Present stock- be added to stockpiles. piles of most of these materials are inadequate to meet rising war con- The accompanying map shows that sumption. For a dozen or more mate- the United States has depended upon rials originating in the Pacific war sources in the Far Eastern Zone of PERCENTAGE OF U.S. DEFENSE MATERIALS COMING FROM THE PACIFIC WAR ZONE CHINA 36.8% TURNING 27.0% PACIFIC BURMA Antonomy PHILIPPINE ISLANDS OCEAN THAILAND 100% FRENCH INDOCHINA 15.9% 10.0% 98.0% 91.6% Monila Fiber Chroma Mongonese SUMATRA Rubber, <<0 BORNEO 100% 100% NEW : NETHERLAND INDIES GUINEA Kopokuinine AUSTRALIA CONFIDENTIAL 4 DECEMBER 12, 1941 5 CONFIDENTIAL NUMBER 65 hostilities for significant propor- jacent to the Pacific war area. tions of nine strategic and critical United States supplies of tung oil, materials. Practically the whole natural resins and coconut oil, al- supply of kapok, manila, fiber, qui- though not stockpile materials, are nine, rubber, and tin have come largely produced in the danger zone. from areas, the supply routes to which are directly threatened. The accompanying chart shows Smaller but still substantial pro-- the status of nine materials, as portions of the stockpile materials indicated by Government stockpiles --antimony, chrome, manganese, and on December 1, 1941, in relation to tungsten--have been imported from, estimated total requirements for this general danger area. Imports of 1942. The estimates of total re- silk, another stockpile material, quirements were made previous to the were practically cut off early after outbreak of hostilities in the Far the freezing of Japanese funds by East. As a result of the declara- the United States at the end of Au- tion of war against the Axis Powers gust 1941. In addition other stra- the military requirements will have tegic and critical materials, such to be enlarged. It is imperative as hog bristles, palm oil, and teak, that steps be taken to insure that which have been recommended for existing industrial stocks of these stockpiling, are produced in and ad- commodities, which are reported to PRESENT U.S. STOCKPILES OF DEFENSE MATERIALS WITH IMPORTANT SOURCES IN THE PACIFIC WAR ZONE ESTIMATED 1942 REQUIREMENTS = 100 PER CENT PER CENT o IO 20 30 40 50 60 70 80 90 100 MANILA FIBER ANTIMONY KAPOK CHROME MANGANESE TIN TUNGSTEN RUBBER QUININE o IO 20 30 40 50 60 70 80 90 100 PER CENT 5 ... CONFIDENTIAL DECEMBER 12, 1941 NUMBER 65 CONFIDENTIAL 6 be substantial--particularly for tion during the depression. The chrome, manganese, rubber, tin, and ratio of the difference between con- manila fiber-are utilized to meet sumption in 1940 and 1932 and total direct defense requirements in the estimated 1942 requirements, both most effective manner. military and civilian, supplies a measure of the degree to which cur- This will involve drastic cur- tailment of civilian consumption to tailment of civilian consumption be- 1932 levels would aid in meeting de- low 1942 estimates. These estimates fense needs. This ratio is given were based on estimated national in- for eight scarce materials in the come for 1942 and can be lowered accompanying table. without serious difficulty. As a rough indication of what might be Since these estimates of 1942 done through curtailment of civilian requirements do not take into ac- consumption of these scarce materi- count the Victory Program, the ra- als, 1940 consumption may be com- tios exaggerate the potential value pared with 1932 consumption since in of this degree of civilian curtail- both years the amount of military ment. On the other hand, for many consumption was very small relative scarce materials it is possible to to the total. Consumption in 1932 reduce civilian consumption far be- represents the low point in consump- low 1932 levels. RATIO BETWEEN CURTAILMENT OF CIVILIAN CONSUMPTION OF SCARCE MATERIALS TO 1932 LEVELS AND ESTIMATED TOTAL REQUIREMENTS IN 1942 (Percent) (Percent) Antimony 37.4 Manganese 73.2 Chrome 53.9 Rubber 33.5 Kapok A 0 Tin 41.6 Manila Fiber 35.0 Tungsten 48.0 8. 1932 consumption of kapok equalled that of 1940 and was only slightly less than estimated requirements for 1942. CONFIDENTIAL ... 6 DECEMBER 12, 1941 NUMBER 65 CONFIDENTIAL I DEFENSE PROGRESS SERIES Airplanes lacked minor components. Lack of a similar carry-over in November The production of military air- created a drop from October but the planes during November dropped to 63, monthly production of light tanks as measured by the weighted index. all was still ahead of schedule. The This was a five point decline from production of medium tanks con- the previous high of 68 established tinued its upward trend, while scout in October, and was 85 percent of car output advanced beyond estimates. estimates established under OPM Schedule 8-G. As of November 30, the weighted index of total production stood at As can be seen in the chart on 43; the financed production require- page XI, the index of total cumula- ments as of this date are as yet un- ted production was 51 at the end of available, but at the end of October November. Forty-nine percent of they amounted to 208. In view of production to date in terms of the the greatly expanded tank program, a weighted index has gone to the sizeable increase in the index of United States armed forces, 48 per- requirements can be expected. cent has gone to the anti-Axis powers under their own purchasing programs, Pending Legislation and the remaining three percent un- der Defense Aid funds. At the end The Third Supplemental National of October, when OPM Schedule 8-G Defense Appropriation Bill, 1942, was established, financed production was passed by the House of Repre- requirements stood at 311, of which sentatives on December 5 and is now 85 percent already had been ordered. before the Senate. Combat Vehicles Labor Turnover in October The weighted index of monthly Accession rates in the basic production for combat vehicles for metal working industries showed a November was 88, according to pre- further decline in October, continu- liminary figures. This represented ing the downward trend which has a seven point decrease from the all- characterized hirings in these in- time high of 95 recorded in October, dustries since peak operations were but the drop was not due to any achieved in midsummer. High acces- serious production problems. The sion rates, however, continued to high October index resulted from the prevail in October in two of our final completion of a number of first-line defense industries--ship- light tanks which had been substan- building (14.60) and aircraft tially assembled proviously, but (10.62). DECEMBER 12, 1941 CONFIDENTIAL I NUMBER 65 CONFIDENTIAL H In the blast furnaces, steel was caused by raw material short- works, and rolling mills industry, ages. Virtually all manufacturing accessions have fallen steadily from industries reported higher quit- a rate of 3.97 per 100 wage earners rates than B. year ago. in June 1941 to 1.97 in October 1941. This industry has operated at Cost of Living Index capacity levels for many months, but recently has experienced difficulty The Bureau of Labor Statistics in securing adequate supplies of cost of living index has risen nine steel scrap, and some finishing points since the beginning of the mills have reported insufficient defense program, in July 1940, as supplies of rough steel. The brass, the chart on page XIV indicates. bronze, and copper products industry Rents were fairly stable during 1940 has reported & steady decline in the but rose gradually in 1941 until rate of accessions since April. The they were 7.5 percent above the current rate of 4.16 compares with a 1935-39 average in October. Food rate of 7.26 in April, and 8.78 in costs rose 14.2 points from July October 1940. This industry has re- 1940 to October 1941. ported serious shortages of copper, zinc, nickel, and steel. Likewise, the machine-tool, electrical machin- ery, and foundries and machine shops industries have also reported steady declines in the rate of accessions sirice the summer months. a The individual items included in the indexes of production are The hiring rate of wage earners weighted to indicate their rela- in all manufacturing industries tive importance (primarily as re- covered in the monthly turnover sur- flected by their dollar value). vey of the Bureau of Labor Statis- The scheduled output for FY 1942, tics fell to the lowest level since established on August 1, 1941, is December 1940 in October. Substan- used as the base; the latest &- tial declines occurred in hiring vailable delivery schedules are rates in all the defense industries measured against this base. The mentioned above, except shipbuild- production rate index measures ing, and also in automobiles, output during the month, average engines, and certain building mate- scheduled monthly production dur- rials industries. ing FY 1942 being the base or 100 percent. The total production in- The only industry to report a dex measures cumulated production significant increase in lay-offs since the start of the program, from September to October was brass, and scheduled total output during bronze, and copper products. This FY 1942 equals 100. CONFIDENTIAL II DECEMBER 12, 1941 III ... CONFIDENTIAL NUMBER 65 TOTAL DEFENSE PROGRAM BILLION DOLLARS CUMULATIVE BILLION DOLLARS 80 80 60 60 PROGRAM 40 40 OBLIGATIONS 20 20 VALUE IN PLACE OR DELIVERED o o J J A S o N D J F M A M J J A S o N D 1940 1941 III ... CONFIDENTIAL DECEMBER 12, 1941 NUMBER 65 CONFIDENTIAL IV DEFENSE PROGRESS SERIES TOTAL UNITED STATES DEFENSE PROGRAM Cumulative 6/11/40 through Monthly FINANCIAL PROGRAM End lat End of End of SUMMARY October, October, November, full year October, November, 1940 1941 1941 6/30/41 1941 1941 (Million dollars) TOTAL DEFENSE PROGRAM IN U.S. a Program 41,131 68,252 P 68,360 I 2,553 6,135 P 108 Unobligated balance Is 9,450 I 18,590 P 18,220 - - - Obligations r 31,681 F 49,662 P 50,140 2,359 5,329 P 478 Value delivered and/or in r 8,701 P 14,814 Is place n.c. 475 P 1,731 n.a. Checks paid d 8,503 14,129 n.s. 491 1,706 n.a. U. S. FINANCED PROGRAM b Program 37,446 64,483 P 64,591 F 2,015 6,135 P 108 Unobligated balance F 9,450 = 18,590 P 18,220 - - - F 27,996 F Obligations 45,893 P 46,371 r 1,811 r 5,280 P 478 d Checke paid 6,430 11,721 n.a. 312 1,626 n.a. TREASURY GENERAL FUND o Program 34,638 60,156 P 60,264 1,803 I' 6,135 a 108 Unobligated balance r 7,978 F 17,356 P 16,986 - - - Obligations r 26,660 42,800 P 43,278 1,760 4,984 P 478 Checks paid di by U.S. Treasury 6,080 11,010 12,447 297 1,526 1,437 MUNITIONS PROD. & DEFENSE CONSTRUCTION Program 36,671 57,120 P 57,232 F 1,762 3,676 P 112 Unobligated balance I' 7,188 r 12,370 P 12,103 - - - Obligations r 29,483 44,750 P 45,129 2,354 4,870 P 379 Value delivered and/or in place e Fx 6,945 P 11,670 P 13,150 r 360 P 1,300 P 1,480 Value not delivered nor in place r 22,538 = 33,080 P 31,967 - - - NON-MUNITIONS ITEMS, TOTAL Program 4,460 11,132 P 11,128 791 2,459 P & Unobligated balance r 2,262 6,220 P 6,117 - - - Obligations r 2,198 4,912 P 5,011 5 459 P 99 Checks issued by agencies* 1,756 P 3,144 n.a. 115 P 431 n.a. Table continued on following page. For footmotes see page opposite page X. Graph appears on opposite page. DECEMBER 12, 1941 CONFIDENTIAL IV V'... CONFIDENTIAL NUMBER 65 MUNITIONS PRODUCTION BILLION DOLLARS CUMULATIVE BILLION DOLLARS 50 50 40 40 30 PROGRAM 30 OBLIGATIONS 20 20 10 10 VALUE DELIVERED 0 o J J A 5 o N D J F M A M J J A $ o N D 1940 1941 , a V ... CONFIDENTIAL DECEMBER 12, 1941 NUMBER 65 CONFIDENTIAL VI DEFENSE PROGRESS SERIES TOTAL UNITED STATES DEFENSE PROGRAM Cumulative 6/11/40 through Monthly End let End of End of FINANCIAL PROGRAM full year October, November, October, October, November, 6/30/41 1941 1941 1940 1941 1941 (Million dollars) BREAKDOWN OF MUNITIONS PRODUCTION MUNITIONS PRODUCTION, TOTAL Program 28,024 44,181 P 44,293 1,192 3,298 P 112 Unobligated balance 4,491 F 9,337 P 9,120 - - . Obligations 23,533 P 34,844 P 35,173 1,801 P 3,749 P 329 Value delivered and/or in place . r 4,440 P 7,290 P 8,275 235 P 825 P 985 Value not delivered nor in place F 19,093 P 27,554 P 26,898 - - - AIRPLANES, PARTS & ACCESSORIES Program 8,481 13,174 P 13,166 397 655 P -8 Obligations 7,281 11,045 P 11,106 809 1,383 P 61 Value delivered 1,010 P 1,735 P 1,980 T 50 P 215 P 245 ORDNANCE Program 7,780 13,330 P 13,451 199 1,553 P 121 Obligations 5,418 9,921 P 10,107 359 2,128 P 186 Value delivered 700 P 1,280 P 1,510 30 P 180 P 230 NAVAL SHIPS Program 6,654 8,235 P 8,232 21 110 P Obligations r -3 6,452 7,505 P 7,560 191 142 P. 55 Value delivered and/or in place I. 960 P 1,590 P 1,780 "I 55 P 160 P 190 MERCHANT SHIPS Program 1,766 3,805 B. 3,805 10 857 0 Obligations r 1,484 2,251 P 2,251 16 132 n.e. Value delivered and/or in place 190 P 320 385 10 P 50 P 65 OTHER MUNITIONS AND SUPPLIES Program 3,343 5,637 P 5,639 565 123 P 2 Obligations r 2,898 4,122 F 4,149 426 -36 P 27 Value delivered 1,580 P P I 2,365 2,620 90 P 220 P 255 Table continued on following page. For footnotes see page opposite page X. Graph appears on opposite page. DECEMBER 12, 1941 CONFIDENTIAL VII . "," CONFIDENTIAL NUMBER 65 DEFENSE CONSTRUCTION BILLION DOLLARS CUMULATIVE BILLI. , DOLLARS 15 15 PROGRAM 10 10 OBLIGATIONS 5 5 VALUE IN PLACE o o J J A 5' o N D J F M A M J J A S o N o 1940 1941 VII... CONFIDENTIAL DECEMBER 12, 1941 NUMBER 65 CONFIDENTIAL VIII DEFENSE PROGRESS SERIES TOTAL UNITED STATES DEFENDE PLOGRAM Cumulative 6/11/40 through Nonthly End of End of End of FINANCIAL PROGRAM full year October, November, October, October, November, 6/30/41 1941 1941 1940 1941 1941 (Million dollars) BREAKDOWN OF DEFENSE CONSTRUCTION DEFENSE CONSTRUCTION, TOTAL Program 8,647 12,939 P 12,939 570 378 a o Unobligated balance r 2,697 r 3,033 P 2,995 - - - Obligations r 5,950 r 9,906 P 9,956 553 1,121 a 50 Value in place 2,505 P 4,380 P 4,875 F 125 P 475 P 495 Value not in place If 3,445 a 5,526 P 5,069 - - INDUSTRIAL FACILITIES Program 5,305 7,826 P 7,826 322 381 P o Obligations F 3,050 r 5,547 P 5,519 360 688 P -28 Value in place 960 a 1,960 P 2,235 30 P 250 a 275 POSTS, DEPOTS, STATIONS Program 2,850 4,471 P 4,471 98 -3 P o Obligations En 2,625 3,950 P 4,016 158 392 P 66 Value in place 1,430 e 2,150 P 2,330 T 95 P 190 P 180 HOUSING, NON-MILITARY Program 492 642 642 150 o o Obligations 275 409 P 421 35 41 P 12 Value in place 115 A 270 P 310 o P 35 P 40 BREAKDOWN OF CLASSES OF NON-MUNITIONS NON-MUNITIONS, TOTAL Program 4,460 11,132 P 11,128 791 2,459 P 7 Unobligated balance r 2,262 6,220 P 6,117 - - - Obligations 2,198 4,912 P. 5,011 5 459 P 99 Checks issued by agencies 1,756 P 3,144 n.a. 115 P 431 n.a. STOCKPILE Program 983 1,631 P 1,631 102 o n.a. Obligations 470 910 n.s. 23 55 n.a. Checks issued by agencies 192 340 n.a. 11 45 n.a. AGRICULTURAL & MISC. EXPORTS (DEFENSE AID) Program 1,250 3,043 P 3,043 o r o n.e. Obligations 109 790 n.a. o 148 n.o. Checks issued by agencies 5 248 n.a. o 119 n.s. Table continued on following page. For footnotes see page opposite page I. Graph appears on opposite page. DECEMBER 12, 1941 CONFIDENTIAL VIII FOOTNOTES DEFENSE PROGRESS SERIES See Opposite Page Data on obligations and unobligated balances are tentative pending determination of reserves not available for immediate obligation. n.a. Not Available # Revised P Preliminary a Total defense program includes all funds and authorizations made available for defense purposes by the United States Government plus foreign orders placed in this country since November 1939. The major portion of the ex- isting program has been approved since June 11, 1940, but some authoriza- tions (particularly portions of the naval expansion program, the merchant shipbuilding program, and the stockpile program) were sade available even earlier. All funds are shown during the fiscal year in which they are a- vailable for obligation. b United States financed program includes the defense activities of all United States Government agencies (including Defense A1d) plus the defense activities of government owned corporations, but does not include foreign orders. 0 United States Treasury General Fund includes the defense activities of all United States Government agencies (including Defense A1d). It does not include the activities of government owned corporations or foreign orders in the United States. 4 Checks paid include (1) all checks paid out of the Treasury General Fund (of. footnote % (2) checks issued by the Reconstruction Finance Corpora- tion and subsidiary Government corporations; (3) checks issued by foreign purchasing commissions. e Value delivered and/or in place includes (1) value delivered and/or in place for ships and value of production for other munitions, (2) value in place for defense construction, and (3) checks issued by finance officers for non- munitions items. f Program and obligations for pay for civilians and for the Navy include only that specifically mentioned in appropriation bills, while the cash disburse- ment figures include, in addition, executive defense pay which cannot be separately distinguished in the appropriation bills. E Report on checks paid by the Treasury for the account of the Maritime Com- mission saices allowance for receipts credited to the Construction Loan Fund. NUMBER 65 CONFIDENTIAL IX DEFENSE PROGRESS SERIES TOTAL UNITED STATES DEFENSE PROGRAM Cumulative 6/11/40 through Monthly End lst End of End of INANCIAL PROGRAM full year October, November, October, October, November, 6/30/41 1941 1941 1940 1941 1941 NON-MUNITIONS (CONT'D) (Million dollars) PAY, SUBSISTENCE & TRAVEL Army Military Program 944 2,563 2,563 505 F 1,949 O Obligations 934 1,684 n.a. 52 146 n.s. Checks issued r 696 1,210 n.a. r 37 140 n.a. Navy Military Program 376 804 804 2 o o Obligations 334 490 535 29 2? 45 Checks issued r 388 548 n.e. I 39 40 n.a. Civilian Payroll Program 32 170 170 28 16 O Obligations r 32 117 n.a. 3 4 n.a. Checks issued 356 574 n.s. 23 60 n.a. MISCELLANEOUS NON-MUNITIONS Program 875 2,921 P 2,917 154 494 P in Obligations F 319 921 P 975 -102 77 P 54 Checks issued by agencies 119 224 n.s. 5 27 n.e. BREAKDOWN BY AGENCIES AGENCIES INCLUDED IN TREASURY GENERAL FUND U. S, ARMY Program 13,135 24,606 24,606 1,377 o o Obligations 11,404 20,598 n.a. 1,039 3,746 n.a. Checks paid by U. S. Treasury 3,636 6,209 6,913 134 785 704 U. S. NAVY Program 12,308 17,627 17,735 85 113 108 Obligations r 11,182 15,471 15,937 667 708 466 Checks paid by U. S. Treasury 2,217 3,791 4,233 150 442 442 DEFENSE AID Program 7,000 12,985 12,985 - 5,985 0 Allocations 5,177 6,784 n.a. - 315 n.e. Obligations 2,458 4,036 n.a. - 340 n.a. Checks paid by U. S. Treasury 21 456 653 - 192 197 U. S. MARITIME COMMISSION Program 969 2,668 2,268 o -2 0 Obligations 886 1,635 n.a. 6 132 n.a. Checks paid by U. S. Treasury (net) 44 94 120 10 21 26 Table continued on following page. For footnotes see opposite page. DECEMBER 12, 1941 CONFIDENTIAL IX FOOTNOTES DEFENSE PROGRESS SERIES See Opposite Page Data on obligations and unobligated balances are tentative pending determination of reserves not available for immediate obligation. n.a. Not Available = Revised P Preliminary a Total defense program includes all funds and authorisations made available for defense purposes by the United States Government plus foreign orders placed in this country since November 1939. The major portion of the 6X- isting program has been approved since June 11, 1940, but some authorise- tions (particularly portions of the naval expansion program, the merchant shipbuilding program, and the stockpile program) were made available even earlier. All funds are abown during the fiscal year in which they are - vailable for obligation. b United States financed program includes the defense activities of all United States Government agencies (including Defense A14) plus the defense activities of government owned corporations, but does not include foreign orders. e United States Treasury General Fund includes the defense activities of all United States Government agencies (including Defense Aid). It does not include the activities of government owned corporations or foreign orders in the United States. 4 Checks paid include (1) all checks paid out of the Treasury General Fund (of. footnote % (2) checks issued by the Reconstruction Finance Corpora- tion and subsidiary Government corporations; (3) checks issued by foreign purchasing commissions. e Value delivered and/or in place includes (1) value delivered and/or in place for ships and value of production for other munitions, (2) value in place for defense construction, and (3) checks issued by finance officers for non- munitions items. f Program and obligations for pay for civilians and for the Navy include only that specifically mentioned in appropriation bills, while the cash disburse- ment figures include, in addition, executive defense pay which cannot be separately distinguished in the appropriation bills. E Report on checks paid by the Treasury for the account of the Maritime Com- mission makes allowance for receipts credited to the Construction Loan Fund. NUMBER 65 CONFIDENTIAL X DEFENSE PROGRESS SERIES TOTAL UNITED STATES DEFENSE PROGRAM Cumulative 6/11/40 through Monthly End 1st End of End of October, October, November, FINANCIAL PROGRAM full year October, November, 1940 1941 6/30/41 1941, 1941 1941 (Million dollars) AGENCIES INCLUDED IN TREASURY GENERAL FUND (CONT'D) OTHER U. S. AGENCIES Program 1,226 2,270 2,270 341 39 o Obligations F 730 1,060 n.a. 48 58 n.a. Checks paid by U. S. Treasury 162 460 528 3 86 68 ADDITIONAL AGENCIES INCLUDED IN U. S. FINANCED PROGRAM R. F. C. AND SUBSIDIARIES Program 2,808 4,327 n.a. 212 0 n.a. Obligations 1,336 3,093 n.a. 51 296 n.a. Checks issued by R. F. C. 350 711 n.a. 15 100 n.a. ADDITIONAL INCLUDED IN TOTAL DEFENSE PROGRAM FOREIGN ORDERS Program (orders) 3,685 3,769 3,769 538 49 0 Obligations 3,685 3,769 3,769 538 49 0 Checks issued by Purchasing missions 2,073 2,408 n,a, 179 80 n.a. OTHER DEYKNSE INDICATORS VALUE OF FACIL. ON APPLIC. FOR CERT. OF NECESSITY (Million dollars) Total 1,424 n.a. n.a. - n.a. n.a. Approved, private funds 829 n.a. n.a. - n.a. n.a. Approved, public funds 201 n.a. n.a. - n.a. n.a. Disapproved 7 n.a. n.a. - n.a. n.a. Pending 387 n.a. n.a. - n.a. n.a. DEFENSE HOUSING (Number of dwelling units) Fund allocations 110,298 141,522 145,655 4,250 4,692 4,133 Constr. contracts awarded 78,820 115,141 120,976 r 9,297 11,970 5,835 Construction completed 21,768 54,884 65,186 o 9,300 10,302 ECONOMIC ACTIVITY RELATED TO DEFENSE 1940 1941 July January September October (Thousand workers) DEFENSE EMPLOYMENT Private, 18 major indus. 1,660 2,038 2,671 2,731 Private, controts., pub, constr, 13 448 435 n.a. Public 117 171 234 n.a. Total direct defense 1,790 2,657 3,329 n.a. I Revised data P Preliminary n.a. Data not Available For footnotes see opposite page. X DECEMBER 12, 1941 CONFIDENTIAL H CONFIDENTIAL NUMBER 65 MILITARY AIRPLANES INDEX OF CUMULATIVE TOTAL PRODUCTION (TOTAL PRODUCTION, F.Y. 1942:100) 400 400 31 By This Time We 300 Should Produce 300 IN Foreign Orders 265 Defense 200 200 Novy Schedule 00 100 100 TO THE END OF NOVEMBER We Expected To Produce 52 5 - Produced 51 Adual o o JASONOJFMAMJJASONDJFMAMJJASONOJFMAMJ Financed Ordered Produced 1940 1941 1942 1943 Production Requirements As of As of Oct. 31, 1941 Nov.30,1941 INDEX OF PRODUCTION DURING MONTH ( AVGE. MONTHLY PRODUCTION, F.Y. 942 4 100 ) 200 200 Schedule Actual DURING NOVEMBER - Expected to Produce 100 74 100 We Produced 63 o o JASONOJFMAMJ JASONDJFMAMJ JASONDJFMAMJ 1940 1941 1942 1943 II ... CONFIDENTIAL DECEMBER 12, 1941 NUMBER 65 CONFIDENTIAL ... III DEPENSE PROGRESS SEATES DEFENSE EQUIPMENT INDEXES Combat Airplanes Army-type Ammunition Major Con- Verchint Vehicles Suns bet Shipe Ships SCHED. ACTUAL SCHED. ACTUAL someo, ACTUAL SCHED. ACTUAL sches, ACTUAL SCHED. ACTUAL AB or - or AS or AS or AS or AS of NOV. 1. NOV. 1 NOV. 1 NOV. 1 OCT. 1 AUG, 1. Average monthly production YT 1942-10 CONTHLY PRODUCTION DATE DURING 1940 July 16 a to b F, 9 December 26 17 14 11 3º 18 1941 March 34 11 30 44 26 June 45 31 41 La 55 27 September 61 73 67 20 17 45 October' 68 95 of 22 92 109 63 November 2 63 at P 88 or : an ao December " IN a es " as 1942 January as 120 sau 101 109 110 February 122 12 127 138 as 125 March 109 IN IM 1 228 IN June 207 IM The & un a Av. monthly prod. FY 1942 100 100 100 100 8 100 Peak month 188 (12/42) (8/42) 1M (7/42 and (12/42) 159 (11/42) 282 (7/42) TOTAL CIMULATIVE PRODUCTION TO Total producti FY 1962-100 1940 July 31 1 2 1 December 31 8 4 7 16 6 1941 March 30 16 6 13 e 9 27 12 June 30 27 12 22 11 42 19 September 30 41 28 38 15 61 28 October 31 46 36 F 17 = 70 33 November 30 52 51 - P 43 52 as 2 a December 31 50 84 = x N 47 1942 January 31 " as R a " se February 28 H = #2 of " #? March 31 #? If at 50 100 a June 30 122 129 120 118 132 120 Total production FT 1942 100 100 100 100 100 100 Financed production requirements November 1 311 208 265 393 452 316 Ordered to November 1 265 202 251 258 452 316 To be Ordered November 1 46 6 14 135 o o "Average July 1, 1940 - Dec. 31, 196), PAverage July 1, 1940 - April 30, 1941, *April 30, 1941. DECEMBER 12, 1941 CONFIDENTIAL ... III