A Fateful Fight That Boosted Military-Industrial Complex

June 7 (Bloomberg) -- You don’t hear much about the battle of the Machine Tool Reserve anymore, and that’s a shame. Fought inside the Beltway in the mid-1950s, it was a defining tussle over the nature of postwar national defense.

On one side were Harry Truman and Charles E. “Electric Charlie” Wilson, the ex-head of General Electric. On the other were Dwight Eisenhower and Charles E. “Engine Charlie” Wilson, the ex-head of General Motors. The former wanted to stockpile industrial equipment and raw materials that could be used to jumpstart arms production in the event of war. The latter wanted to stockpile the arms themselves, continuously replacing and upgrading them even in times of peace.

Ultimately, Eisenhower and Engine Charlie won, and their model for defense production is the one followed by the Pentagon to this day. They got no laurels, but it’s arguable that no single debate did more to shape the modern military.

It’s certainly true that no other conflict involved a fight over the fate of 10 million pounds of government-owned goose down.


The story begins immediately after World War II, as military planners sought to prepare for the battle everyone was sure was coming -- the one with the Soviet Union. (It even had a name: M-Day. “M” for mobilization.)

One of the first vulnerabilities identified was in the supply of machine tools -- things like hydraulic forges, lathes and drill presses -- that were needed to make tanks, artillery and airplanes. The Great Depression had sapped the country’s machine-tool stock, leaving its arms-production capacity weak at the outset of World War II. Planners feared that the enormous drop-off in arms production after the war would lead to a similar shortage. As early as October 1945, Congress was hearing proposals for a government-owned machine tool reserve. The initial target was 65,000 units.

The sudden onset of the Korean War in 1950 pushed politicians and planners to take action more quickly than expected: Production of vital war materiel was delayed by as much as 18 months by a shortage of machine tools. Truman felt compelled to mention the emergency in his State of the Union address. Electric Charlie Wilson, chief of the all-powerful Office of Defense Mobilization -- a man whose direct control of the U.S. wartime economy earned him the nickname “the co-president” -- desperately commandeered raw materials and ordered price controls to bring tool production rapidly up to speed.

It felt like the opening years of World War II all over again, even as war with the Soviets appeared ever closer. An arms shortage then could prove fatal to Western democracy.

And so throughout 1952, Truman and Electric Charlie pressed the Pentagon to make the stockpiling of arms-making tools its official policy. They succeeded in the final days of the administration.

Incoming president Eisenhower and his choice for secretary of Defense, Engine Charlie, opposed the move. Nevertheless, in July 1953 Congress passed a $500 million appropriation bill for initial funding of the tool stockpile. Although it was essentially a piece of Truman legislation, Eisenhower signed it into law. The stockpilers had won the opening round.

More Weapons

Engine Charlie, however, still had options as secretary of Defense. The Air Force promptly “discovered” that its tooling inventory was sufficient for the moment. The money sat unused. And when the appropriation bill came up for renewal in 1954, it was cut to $100 million. Meanwhile, funds flowed freely into weapons purchases and research. The shift to the Engine Charlie model of defense preparedness -- the constant replacement of materiel with newer, more advanced models -- had begun.

Still, inertia worked in the stockpilers’ favor for a while. In the latter half of the 1950s, under various defense programs, the government built up vast reserves of “strategic” material: metals (including basics like aluminum and titanium, but also exotics like platinum and niobium); minerals (including asbestos and diamonds); rubber and various plastics; and 10,220,000 pounds of goose down (in the event of a winter war with the Soviets). By the time Eisenhower left office, the value of these stocks was estimated at nearly $9 billion.

With the advent of ICBMs, nuclear submarines, and increasingly fast and deadly aircraft, however, the old demand for sheer weight of weaponry was being rendered obsolete, and the stockpiling faction was clearly in decline. War no longer hinged on the quantity, but rather on the quality, of weapons.

Moreover, the military-industrial complex Eisenhower warned about in his famous final address had emerged. Defense contractors weren’t interested in stockpiling; they embraced a world in which constant spending on new weaponry would keep industry rolling. Innovation, not stability, was their goal.

Although it now seems quaint, stockpiling had been seen as a way of keeping up the traditional wall between government spending and private industry. Only in a public emergency would the government’s materials be called upon. By contrast, uniting public and private interests in a “permanent armaments industry” -- the phrase is Eisenhower’s -- was a revolutionary departure. (And Eisenhower, who oversaw that revolution, worried at its reach. “We must never let the weight of this combination endanger our liberties or democratic processes,” he warned.)

When John F. Kennedy took office in January 1961, one of his first orders was a review of the government stockpile. It was found to be bloated, expensive and full of increasingly obsolete stuff. The dismantling began. Most of the raw materials found buyers, but the machine tools were actually a hard sell. The equipment was now hopelessly outdated for defense production.

What it was good for was vocational training. Over the next three decades, a sort of military-educational complex formed around the remaining machine tools, which found their way, through various Defense, Labor and Education Department programs, into technical and engineering schools. From more than 200,000 pieces of machinery in 1965, the stockpile had been reduced to about 30,000 by 1994, when the last warehouses were closed, a final disbursement conducted and the machine-tool reserve came, almost unremarked, to its end.

(Tim Heffernan writes about heavy industry for the Atlantic and Popular Mechanics. The opinions expressed are his own.)

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