Vinson-Trammell meant steady business, if not an impetus for expansion. During the second half of the 1930s, Electric Boat and the Portsmouth Navy Yard were each able to build two or three submarines a year. Two new destroyers a year were turned out by at least four builders—Bath Iron Works, Bethlehem Steel’s Fore River (Quincy, Massachusetts) yard, Federal Ship, and the Charlestown (Boston) Navy Yard. In October 1937, the Brooklyn Navy Yard laid the keel for the North Carolina, the first new American battleship to be built since the signing of the Washington Naval Treaty in 1922. Altogether, the congressional appropriations from 1933 to 1937 allowed the Navy to order two battleships, three aircraft carriers, three heavy cruisers, nine light cruisers, sixty-three destroyers, and twenty-six submarines.10
The builders of warships received another boost in May 1938, with the passage of the Fleet Expansion Act. When the war started in Europe in September 1939, American shipyards were in the midst of building two new aircraft carriers, eight battleships, five cruisers, and three dozen destroyers. Of the 1.3 million tons worth of warships available to the Navy in 1940, half had been added to the fleet since 1934.11
The new contracts went to the handful of public and private yards that had been serving the Navy throughout the interwar period. In early 1939, Newport News received the order for the new aircraft carrier Hornet, along with one of the four new 35,000-ton South Dakota–class battleships. The other three ships in this class, which would not enter service until after Pearl Harbor, went to New York Ship, Bethlehem–Fore River, and the U.S. Navy Yard at Norfolk, Virginia. In mid-1939, the Navy ordered two bigger battleships, of the new 45,000-ton Iowa class, to be built in its own yards in Philadelphia and Brooklyn. Among the smaller combatants ordered under the 1938 act were six light cruisers, sixteen destroyers, and fourteen submarines. For Bath Iron Works and the Electric Boat Company, which specialized in destroyers and submarines, respectively, the new orders pushed 1939 sales to $15 million, double what they had been two or three years earlier.12
Because warships ordinarily took two to three years to complete, the 1938 orders determined the size and shape of the U.S. Navy fleet that was available for service immediately after Pearl Harbor. None of these orders in the 1930s could fully prepare the Navy’s top shipbuilders for the sort of expansion that they would undertake in wartime, when they would grow temporarily into truly big businesses. However, the 1930s contracts did allow a handful of expert shipyards to thrive. Bath Iron Works, where employment had fallen to fewer than three hundred workers in 1932, boasted nearly two thousand on the payroll by 1938. Newport News saw its workforce grow from about 7,300 in 1937 to 11,500 by 1940.13
Besides enlivening individual yards, the rise of warship orders in the 1930s also strengthened the small network of public and private organizations that constituted the naval shipbuilding industry. This network went beyond the half-dozen private-sector shipbuilders and the eight U.S. Navy yards. Besides these shipbuilders, key players included the Navy’s Bureau of Construction and Repair and its Bureau of Engineering, well-informed customers that helped determine the specifications for the vessels. Also critical were private ship architects, the most important of which was Gibbs & Cox, based in New York City. Together with designers at the private shipbuilders and the Navy yards, Gibbs & Cox helped draft new hull designs that could be integrated with improved steam turbine power plants, using high pressures and high temperatures. The builders of these turbines, including General Electric (GE) and Westinghouse, ranked among the most important members of the naval-industrial complex. Thanks to the Navy orders of the 1930s, this tight network—comprising shipyards, designers, engine makers, and Navy procurement bureaus—started World War II able to draw upon several years of collaboration and familiarity.14
Besides naval shipbuilding, the other major World War II industry most stimulated by orders in the 1930s was the one that made aircraft. Here again, an expansion of orders in the late 1930s was critical for the disposition of forces that would be available by the time of Pearl Harbor. Planes and their engines could be produced somewhat faster than the large warships, but it still usually took at least two years to move from design to quantity production.15 This lag meant that procurement of most of the planes available to the Navy and the AAF by early 1942 had occurred before summer 1940, when the United States truly ramped up its mobilization efforts.
The aircraft expansion was shaped by a new factor, which had not been significant in the case of warships. This was the role of foreign demand—most notably, in the form of large purchases and capital investments by France and Britain. By spring 1939, when the U.S. Congress authorized expenditures for aircraft expansion comparable with the funds that it had provided previously for warships, the British and French orders had already provided the American aircraft industry with a major stimulus.
The aircraft industry, like shipbuilding, had suffered from the end of military orders after World War I. But it was a less mature industry, with dreams of a future in which air travel would become commonplace. By the mid-1930s, after a wave of consolidation was reversed by antitrust action, the adolescent aircraft industry remained highly competitive. Across the country, at least a dozen viable airframe manufacturers had military contracting experience. With just 36,000 workers in 1938, the aircraft industry was still quite small. Dependent on military sales and exports, it was also fragile. Among the leading aircraft manufacturers, only Douglas—maker of the DC-2 and DC-3—enjoyed much success as a supplier of civilian airliners. From 1935 to 1937, modest orders from the Air Corps and the Navy, most of which offered low profit margins, accounted for 40 percent of the industry’s sales. Another third or so of the industry’s output was absorbed by more profitable export sales, many of them to Latin American nations and China.16
Exports became far more important from 1938 to 1941, when large orders from France and Britain transformed the American aircraft industry. The British and French purchases, along with smaller orders by a few other foreign customers, amounted to over $1 billion—nearly half of the industry’s sales during those years.17 By February 1939, before Congress increased funds for U.S. military aircraft procurement, the British and French governments had already ordered more than 1,200 planes from American companies. France alone spent over $300 million on American aircraft and engines in 1938 and 1939—about twice the amount spent by the U.S. military. By April 1940, Britain and France together had ordered nearly six thousand planes and more than fourteen thousand engines, at a cost of $573 million.18
For individual firms, the British and French aircraft purchases of 1938–40 were electrifying. The buying spree started in summer 1938, a few weeks after a British delegation toured aircraft plants in California. In June, Britain ordered two hundred of Lockheed Aircraft’s two-engine “Hudson” bombers, which would not begin flight tests until year’s end. Eventually, the British would order 1,100 more. But for Lockheed, a small company with two thousand employees, even the first order seemed enormous. With the Hudsons priced at $85,000 each, the initial order promised $17 million in revenue over the next couple of years—far more than the $2–$3 million in annual sales that the company had been recording in the mid-1930s. During the six months after the first Hudson order, Lockheed doubled its workforce and added a second eight-hour shift. Thanks to the British order, Lockheed was able to move more quickly into production of its fast twoengine P-38 fighter, which it started to deliver to the Air Corps in 1939.19
While Lockheed’s change in fortunes was extreme, many other American airframe makers also grew rapidly. France and Britain ordered dozens of new planes from Douglas, North American Aviation, the Glenn L. Martin Company, and the Curtiss-Wright Corporation. From 1938 to early 1940, these companies and others across the industry tripled their workforces.20
For the airframe makers and aero engine manufacturers, foreign governments were important sources of capital. Britain, as part of its first Hudson bomber order, provided Lockheed with a cash advance of $360,000. This helped tide Lockheed over until early 1939, when the company was able to raise $3 million by issuing more stock. Meanwhile, France provided Martin with $2.4 million to expand the company’s main plant in Baltimore, in order to help Martin fill an
