Financial History 25th Anniversary Special Edition (104, Fall 2012) | Page 46

but only one of seven members of the
National Defense Advisory Commission.
Knudsen soon emerged as the group’s
de facto leader and began to organize
industry’s voluntary efforts to divert some
capacity to producing armaments.
The book details Knudsen’s successes
and failures as he pursued the singleminded goal of boosting the output of all
types of military goods while maintaining
some production for the civilian economy.
As an experienced manufacturing executive, he knew the most important challenge was not to deliver a certain number
of planes or tanks by a certain date (the
goal of the top-down-thinking political
class), but to establish a bottom-up system
of contractors and sub-contractors who
would be mobilized and incentivized to
build a production machine capable of
sustaining itself over the long haul.
Without his efforts from mid-1940 to
late 1941, neither the United States nor its
allies would have had sufficient stores of
weapons, vehicles and other equipment to
wage the extended war that overwhelmed
the world after the attack on Pearl Harbor.
With few political instincts, Knudsen
was ill-equipped to handle the steady diet
of protests and disagreements coming
from bureaucrats, politicians and union
leaders who viewed his ideas with suspicion or disdain. Indeed, that naiveté
prevented him from understanding the
widespread anger at some of his actions
and caused him to be blindsided when he
was unceremoniously dumped from his
position in January 1941.
By that time, American industry had
produced more than 19,000 planes, 3,900
tanks, and 1.1 million tons of merchant
shipping, quantities considered unattainable to government planners less than two
years earlier. The President preferred to
have a formally-appointed War Production Board take over the next stage of the
manufacturing challenge.
Knudsen was at once emasculated and
resuscitated; at the urging of some officials
who appreciated the man’s worth to the war
effort, Roosevelt made him a Lieutenant
General and asked him to be an unofficial
facilitator and troubleshooter for the War
Department’s Materiel Command. From

that perch, Knudsen continued to influence
the production of war material until June
1945. A limited list of such output includes
more than 88,000 tanks, 324,000 planes,
257,000 artillery pieces, 2.4 million trucks
and 41 billion rounds of ammunition.
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