CHAPTER TWENTY-FOUR

A Chill Sets In

Don Brown, our president, who had been in ill health for some time, was now unable to give personal attention to the multitude of matters, and it fell to me to try to get some coordinated action on industry problems. Any sort of joint action by our Aeronautical Chamber of Commerce had long ago been proved impossible, first because joint action called for unanimous consent and no two of our bully boys in the industry could agree on anything. Of course on rare occasions we reached an agreement, and such an occasion developed one day in the office of the Assistant Secretary of War.

Out of the confusion and extravagance incident to the last war, Congress had passed the Army Reorganization Act of 1921, under which responsibility for production planning and mobilization had been lodged in the Assistant Secretary of War. That office had been collecting an array of card indexes which purported to assign some sort of role for mobilization to each manufacturer. After some twenty years of this, the Assistant Secretary, then Mr. Louis Johnson, having decided to take a look at his handiwork, had summoned the aircraft industry. The conference was called to order by General Westover, then Chief of the Air Corps, who was supported by “Hap” Arnold, Assistant Chief, and by Colonel Burns, from the Office of the Assistant Secretary of War.

General Westover stated the situation: the Army would like to have our estimate of the effectiveness of their war plans effort. If, after looking the situation over, we gave general approval, they would ask us to remain over another day to suggest improvements. They wanted our frank opinion of progress. General Westover then introduced General Arnold, who conducted the inquiry.

Hap Arnold was a favorite with the industry. Forthright, courageous, and decisive, he had supported Billy Mitchell at a time when less able men would have taken the easier course. Along with a handful of similarly able men like Hugh Knerr, a classmate of mine and rifle teammate who had transferred to the Army, Louis Brereton, also a Naval Academy graduate, Frank Andrews, Carl Spaatz, Jimmy Doolittle, and others, Hap had preached the air-force doctrine in fair and foul weather. Now he grinned at us across the table.

“Well,” he inquired, “who wants to drop the opening bomb?” From the back of the room the salty voice of Dutch Kindleberger resounded.

“If you ask me,” he volunteered, “I think you’ve had twenty years of hogwash.” There was a murmur of surprise.

“From time to time,” Dutch went on, “you send your bright young men to ask us the same question: ‘how many airplanes can you manufacture X days after M Day?’ And when I counter that question with another—‘what kind of airplanes?’—your young men don’t have the answer.” As Dutch finished, Glenn Martin put in his oar.

“I agree with Dutch,” he began, as a titter greeted the idea that these two might agree on anything.

“You expect us to give you a war plan,” Glenn went on, “before you have answered the question; and furthermore, you expect us to give you something worthwhile at no cost. According to my estimate,” Glenn continued, “it would cost at least ten thousand dollars for us to get up anything useful, and you apparently expect us to advance it out of profits. It can’t be done.” As Glenn finished, Hap glanced my way.

My experience with Army was more limited than that of the others. In Hamilton-Standard, Ray Walsh had handled Army business. In Sikorsky and Vought, the dealings had been mostly with Navy. In Pratt and Whitney, “Tilly” Tillinghast, himself a former Army pilot and a favorite with all, had handled Army contacts. However, there were some fundamentals that seemed to apply to both.

“I agree with Dutch and Glenn,” I began, adding to the unusual flurry of interindustry agreement, “and I’ll go a step farther. For a real test of your war plan, I suggest that you start a staff exercise on mobilization and watch what happens.” Hap Arnold flashed me that quizzical Army expression that wonders how any good could come out of the Navy. I went on to explain.

My own experience in naval operations had shown me that in a dress rehearsal it is seldom the high private in the rear rank who falls down. More likely, it’s the green second lieutenant in the file closers who gets tangled up in his sword. He’s been so busy drilling others, he’s forgotten to read his own book. You have to put machinery into operation to find out where it creaks the loudest. In this case, if the Secretaries of War and Navy would order mobilization for drill purposes by designating a certain day as M Day, Headquarters could then announce the types of airplanes it wanted to put into production and the number of each it required, and then procurement officers could go ahead with drill purchase orders, and the contractors could place orders to suppliers, and so on. About here I noticed a flicker in Hap’s steely eye.

“I guess Dutch and Glenn are right,” he said with a wry grin. “Hell,” he went on, “I can’t begin to tell you today what airplanes we would want to buy, let alone how many. I don’t even know who we expect to fight, nor when, nor where.”

From here on the conference moved rapidly to the crystallization of an idea. Since time is of the essence in mobilization, one way to save time was to build the mobilization plan into current purchasing. When the government placed an order for a certain type of equipment, it could include in the original contract an item calling out a detailed war plan to be paid for under the contract. Such a war plan would include options for war quantities and the contractor would place stand-by orders with his own suppliers for the amounts of materials of all kinds required to fill the options. He and his suppliers would go ahead with architects’ plans, drawings, and all other paper work incident to creating the expanded facilities required by the options, the idea being to get all contract paper work done, even to the determination of critical materials and priorities. Then, upon a signal of execution designating an option, the machine could start operating, without all the preliminary delays, and still leave the procurement agency free to make its decisions at the last minute.

Hap Arnold listened to the discussion. “Well,” he remarked, “I see we won’t need that second day for this conference.” With that he called in General Westover and Colonel Burns, to whom the general plan was explained. General Westover closed the conference with the statement that he intended to get some such plan in operation, if it was the last thing he did.

But of course, with things as they were, neither he nor anyone else could put such an idea into operation. With the outbreak of the war, responsibility for mobilization was shifted out of the Assistant Secretary’s office and into a new and independent agency, which started as the National Defense Advisory Committee and changed its name, at intervals, to the end of the emergency.

Meanwhile, when I got back to Hartford and reported the experience to Don Brown, Don sat a long while looking out the window, across acres that had once been peaceful tobacco fields.

“Well, Skipper,” he said finally, “it looks as though you had sold United Aircraft something, whether the Army buys it or not. We’ll start building our own war-plans organization and get it ready for trouble.” After our estimates of the cost of such a program had come in, we discovered that they totaled just $10,000 per year, the figure Glenn Martin had mentioned down in Washington, but, like Glenn, we had no idea where the money was to come from.

In anticipation of the gradual drying up of government business and with a view to trying to get funds from Congress to help tide us over slack periods, Don Brown had outlined his situation to BUAERO and the Army Air Corps. As a result of efforts by the Armed Forces, Congress had appropriated funds for new engines to be ordered from Pratt and Whitney. It had seemed to us at the time that, with war imminent, the administration might have made better use of relief funds than raking leaves. As a matter of fact, a good deal of relief money was being invested in air fields and armament, but the program was not coordinated; Mr. Ickes and Mr. Hopkins differed as to who was boss. The idea prevailed that peace could be had by just wishing for it. To have spent money for arms, or even to have directed it into the business stream so as to keep the production machine at a high level, would, at that time, have been considered unmoral. On the other hand, spending money wastefully for made work seemed to meet with public approval. The bald fact remained, however, that with war but a few months away, Pratt and Whitney Aircraft, one of the two dependable sources of proved aircraft engines, faced a shutdown, and with it, dispersal of an organization which could never have been reassembled.

To our relief, however, Congress appropriated funds, and the Army notified Pratt and Whitney that it might proceed with the procurement of materials and the production of engines in advance of the formal contract, with the idea of utilizing the allotment to best advantage from the point of view of readiness for emergency. Then, sometime after we had swung into our program, the Air Corps, to our amazement, canceled this informal assurance, and diverted the funds to the procurement of Allison liquid-cooled engines. At that time the General Motors Corporation, owners of Allison, had indicated little need for public relief funds, but to Pratt and Whitney, now almost wholly dependent upon government business, the loss of this critical order was a body blow.

When, later, Don called upon the Assistant Secretary of War, Mr. Louis Johnson, to point out to him the results of his decision, he was advised that the Army had decided to scrap all air-cooled engines in pursuit planes. Next year would probably see the last of air-cooled engines in bombers. He was instructed to start Pratt and Whitney designing liquid-cooled engines at once. To Don, knowing that Allison, equally surprised by the decision, had not yet started tooling, while Pratt and Whitney, already tooled, must remain idle, the decision hardly made sense.

Somewhat bewildered by the change, Don then called on Hap Arnold. Here he learned that the secretary’s decision had also taken the Air Force by surprise. Anxious to keep Allison ticking over, Wright Field had built up such a strong case for liquid-cooled, that the secretary had decided to scrap air-cooled. Since recent pursuit planes like the Seversky had been designed for air-cooled, the decision had left them on a spot. Apparently, however, the decision once taken could not be recalled. No one in the Air Force had dreamed for a moment that it would be taken, but here we were, out on a long limb, and war was in the offing.

As the year 1938 came to a close, we began laying off men, dropping first those who could be the more readily spared. But the time came when the organization was being seriously hurt, and the year-end forecast indicated that, by July, 1939, we would reach the end of our production. Since materials must be in hand five to six months ahead of delivery of the finished article, that meant that time had already begun to run out for Pratt and Whitney. We had long since cut back expenses to the bare minimum and there remained nothing but a final decision to suspend manufacturing operations. Yet even then, Don Brown kept the War Plans Division intact.

Now we had but a single remaining hope: Tom Hamilton in Paris. Tom reported by radiotelephone that the French, now reduced to dire straights, still vacillated, but had established financial credits in the United States and would send a purchasing commission to Washington to open negotiations direct with us. Don Brown, sick as he was, went down to Washington with some of our staff to battle through hours of legalistic verbiage, in smoke-filled rooms of Washington hotels.

Here it developed that the United States Treasury would act as a sort of intermediary between the French commission and the American manufacturers, and that Secretary Henry Morgenthau had turned the job over to Capt. Harry Collins, then head of the Purchasing Division of the Treasury. With the Arms Embargo Act still adorning the legislative library, active participation by the Treasury in negotiations between United States arms manufacturers and a possible “belligerent” had certain aspects of incongruity. However, the whole situation was so phony that this detail escaped public attention.

Capt. Harry Collins provided just the _savoir faire_ necessary to resolve an impossible situation into a completed contract. Harry had served as supply officer on the ancient destroyer-tender _Iris_ back in the dark ages when I had commanded the four-piper _Truxtun_, then based on San Diego. He had resigned his commission to go into business and had there shown the same tact that had endeared him to the temperamental skippers of the Pacific Torpedo Flotilla.

Throughout the negotiations, Don Brown stood fast on the principle that prices to be paid for the equipment should be high enough to permit us to take the necessary financial risks required by the early deliveries specified. The customer should not hamstring us by chiseling prices to the point where our willingness to accept risks was impaired. Fortunately the soundness of this position was apparent to Harry, and his confidence in us enabled him to support it in the discussions with Col. Paul Jacquin of the French commission. The colonel proved to be a man of high character with a sense of fairness and a degree of integrity that finally brought the negotiations to a satisfactory conclusion.

The contract was signed on February 14, 1939, at almost the precise moment when further delay would have done us irreparable harm. As a matter of fact, the time had long passed when a garrison finish might be of any help to France; the chief benefit of this contract lay in the fact that it gave the Pratt and Whitney Aircraft organization a shot in the arm, and put us in such position that when, two years later, the Japs smacked us at Pearl Harbor, we could swing into full-scale production for the American account.

After Don Brown’s return to Hartford, his health forced him to turn more and more of his work over to me. In this I functioned, much as I had once done for Admiral Reeves, as a sort of chief of staff, seeking to do things in the way Don himself would have done them, had he been personally on the firing line. Somewhat earlier, when our difficulties had become serious, I urged Don to invite Fred Rentschler to return to our board as chairman where we could call on him for advice and get the benefit of his judgment. Now we three began working closely together—at least as closely as Don’s declining health permitted.

Don, a singularly attractive and lovable person, having come upstairs by way of the shop, always displayed a strong sense of responsibility for his men. The specter of shutdown weighed heavily on him and now, as the illness that was to prove fatal began closing in on him, his thoughts were still down on the factory floor.

One day he and I walked along an aisle between the machines. Don made some remark to the effect that he longed to be back there where the problems were of the kind a man could get his teeth into. Behind us we heard the voice of a young kid making some crack about how soft it was for guys that did nothing but sit on cushions in paneled offices and look wise. Don turned and brushed the kid away from the machine. After running it awhile in obvious enjoyment, he turned to the workman:

“Listen, son,” he said, not unkindly, “I’d trade jobs with you any day if I could, but you wouldn’t take the responsibility. That’s something you fellows never want to accept.”

Toward midsummer, we began to hear rumors that the French needed more equipment than our humming plant could deliver. By this time Secretary Johnson’s action had reacted to our advantage. The inventory of raw stock, semifinished, and finished parts which they had left on our hands when they canceled our order enabled us to get rolling without the protracted delay which would have been inevitable had our pipe lines been drained before the big freeze. And so, almost overnight, we had the machines humming again and the empty parking spaces around the plant filled up with cars. But this rumor of new plants was a horse of another color.

First of all, we had no capital with which to construct a new addition, nor did it seem likely we could get it had we wanted it—which we didn’t. Having faced the cold shadows of a vacant factory, we had no appetite for more of the same. The punitive attitude of our own government had completely dammed up all sources of private capital for expansion of munitions plants. Actually, the long depression had all but dried up investment in any private venture. The fear and uncertainty which had cast such a pall over the land had been intensified by the drift toward government domination of business and the rise of bureaucratic dictation.

Among other things, there was the sensitive factor of profit control. For instance, the Internal Revenue Bureau of Mr. Henry Morgenthau’s Treasury Department dictated, through its review of income tax returns and its rules and regulations, the amount a manufacturer might charge against the cost of his product for the use of his tools. The manufacturer, having in mind the many elements of this problem, such as the wear and tear on machines, the life cycle of the product he was selling, and many other complex factors, would charge against each item of manufacture what he judged to be its proper share of the cost of the tools. The more he charged, the less was his profit for a given year. In the long run the whole thing washed out. But the Internal Revenue Bureau, sitting in judgment of each case and anxious to prove high profit in order to assess higher taxes, was interested in reducing this depreciation charge as far as possible. Bearing no responsibility for the survival of a company, and having little knowledge of, or interest in, the technical details of the manufacturer’s problem, it tended to set up over-all rules which, even though applicable to one case, might be far out of line for another. And since munitions manufacturers were generally unpopular, they had two strikes on them from the beginning. Real investors, understanding this handicap, were not interested in risking their dollars on this kind of enterprise, nor were the enterprises interested in seeking their money.

Now, if the public policies of the period dried up the flow of capital to private industry, or even reduced it to a trickle, the Arms Embargo Act put the finishing touches upon the process. All Chancellor Hitler had to do to make a “belligerent” out of France was to open war on France, and since the French were now buying aircraft in the United States, the sooner he did the better. On September 1, 1939, Germany invaded Poland; on September 5, France declared war on Germany. President Roosevelt immediately issued his proclamation of neutrality, thus putting the Act into effect and cutting off shipments to belligerents.

Meanwhile, however, the frantic French, desperate by now, had, in a last-minute effort to buy time, insisted upon our creating a new plant and accepting new contracts. Our only course under the circumstances was to insist that they advance the entire amount of the cost of the new facilities, some eight million dollars, and finance the additional contracts for aircraft by advancing working capital under terms agreeable to us. However, under French law, the state was prohibited from investing its funds in a capital outlay on foreign shores. Further, the French, at the time, were pursuing the opposite policy at home; they were expropriating and nationalizing their own industry—a policy that reduced the country from a position of world leadership, following World War I, to one of abject dependence upon American aviation in World War II. How they could agree to go ahead with us under the circumstances we could not see, especially with the Arms Embargo Act hanging over them. But go ahead they did, and under our terms.

Meanwhile, during the protracted negotiations, we went right ahead, in our new War Plans Division, with all the blueprints and schedules, working in close collaboration with our architect, Albert Kahn. We broke ground for the new French plant on October 10, 1939, pushing automobiles out of the parking space on which we had determined to build it. The shop was to have an area of some 300,000 square feet and be tooled to handle about 300 engines per month of our 1830 model. Since this was an engine rated at approximately 1,000 horsepower, we figured that we were going to get 300,000 horsepower per month out of the new plant; in three months we could build enough engines to generate the power of Niagara. Title to the new facility would rest with United Aircraft. On November 5, 1939, Congress repealed the Arms Embargo Act.

Shortly afterward, the British government came into the market for aircraft. This was a surprise, for but a short time earlier, Lord Beaverbrook, then visiting this country, had snorted at the suggestion that Britain might have to look to America for assistance. Yet Sir Henry Self, formerly of the British Air Ministry, arrived in Washington and joined with M. René Plevin of France, in a new coordinated procurement program.

It was shortly after this, on an evening early in 1940 while we were sitting in the library at home, that the telephone rang. It was the watchman over at the plant.

“Secretary Morgenthau has just walked in,” he said, “and he would like to see you.”