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The Second World War and American Recovery

The War That Ended the Depression

In 1940 around 8 million Americans were still out of work and the Depression was in its eleventh year. By 1944 unemployment had effectively disappeared and the United States was producing roughly half of all the world’s manufactured goods. The Second World War achieved what the New Deal could not. Federal spending rose from $9 billion in 1939 to $98 billion by 1944. Forty-million Americans were drawn into uniform or war work between 1941 and 1945. The conflict also reshaped American society at home: black families moved north and west by the million, women entered industries previously closed to them, and the federal government became a permanent presence in everyday life.

Key Fact

Around 8 million Americans were still unemployed in 1940. The war economy from 1941 returned the USA to full employment by 1944. The Second World War — not the New Deal — ended the Great Depression.

Lend Lease and the Path to War

The Neutrality Acts of 1935–37 had committed the USA to staying out of European wars. But by 1940 Britain stood alone against Nazi Germany and could no longer pay cash for American supplies. Roosevelt persuaded Congress to pass the Lend-Lease Act in March 1941, allowing the USA to ‘lend or lease’ weapons, food and oil to Britain and later to the Soviet Union without immediate payment. By 1945 around $50 billion of supplies had been shipped — about $32 billion to Britain, $11 billion to the USSR. Roosevelt described the policy as lending a neighbour your hose if their house was on fire. American factories began to fill with orders even before Pearl Harbor in December 1941.

The Japanese attack on Pearl Harbor on 7 December 1941 ended the debate over neutrality. Within four days the United States was at war with Japan, Germany and Italy. The transformation of the American economy — long under way thanks to Lend Lease — now accelerated dramatically.

The Arsenal of Democracy

War production figures dwarf anything the New Deal had attempted. Between 1941 and 1945 the United States built around 297,000 aircraft, 86,000 tanks, 8,800 warships and 41 billion rounds of small-arms ammunition. The Ford Willow Run plant in Michigan rolled out a B-24 bomber every 63 minutes at peak. Henry Kaiser’s shipyards launched a Liberty cargo ship in just 4–5 days using assembly-line techniques borrowed from car manufacturing. Roosevelt called the United States ‘the arsenal of democracy’ in a December 1940 fireside chat — by 1945 the description was understatement.

Federal spending pumped this expansion. The War Production Board (1942) directed materials and labour. Wages rose by around 65% during the war as factories competed for workers. Personal income tax was extended to most workers for the first time, and the federal government employed around 4 million people directly. New industries grew up where they had barely existed before — aircraft in Los Angeles and Seattle, shipyards on the Gulf coast, atomic research at Oak Ridge, Tennessee.

The New Deal had spent around $4 billion a year at peak. War spending reached $98 billion in 1944 alone — roughly twenty times larger. Critics of the New Deal argue this proves Keynesian deficit spending works when it is big enough. Defenders of the New Deal point out that wartime spending also conscripted 12 million men into the armed forces (removing them from the unemployment count) and silenced the Supreme Court and Republican opposition that had hobbled the New Deal in peacetime. Both sides agree that without Pearl Harbor it is unclear when the Depression would have ended.

African-Americans and the Double V Campaign

War production opened doors that had been closed. The Pittsburgh Courier launched the Double V Campaign in 1942: victory against fascism abroad, victory against racism at home. A. Philip Randolph, leader of the Brotherhood of Sleeping Car Porters, threatened a march on Washington in 1941 unless Roosevelt acted. Roosevelt issued Executive Order 8802 in June 1941 banning discrimination in defence industries and creating the Fair Employment Practices Committee — the first federal civil-rights action since Reconstruction.

During the war around 1.5 million African-Americans moved from the South to northern and western cities for war work — the second wave of the Great Migration. Around a million black Americans served in segregated military units. The Tuskegee Airmen, the all-black 332nd Fighter Group, flew over 15,000 combat sorties and earned a battle reputation that contradicted segregationist arguments about black military performance. Yet violence persisted on the home front: the Detroit race riot of June 1943 left 34 people dead, mostly black.

Women on the Home Front

Women filled the gap left by 12 million servicemen. Around 6 million women joined the workforce between 1941 and 1944, many in heavy industry. Rosie the Riveter — the female industrial worker — became a national symbol after a 1943 Norman Rockwell magazine cover and J. Howard Miller’s ‘We Can Do It’ poster. Women welded ships, riveted aircraft and assembled tanks. Around 350,000 women joined the armed forces in non-combat roles such as the WACs (Women’s Army Corps) and WAVES (Navy). Many earned higher wages than they had ever earned before.

The wartime labour gains for women were partial and contested. Female wages in heavy industry were on average around 60% of men’s. Women were widely expected to give back their jobs at the end of the war. Working mothers struggled with limited childcare, although the 1942 Lanham Act funded around 3,000 federal day-care centres. After 1945 around 4 million women were dismissed from war industries to make way for returning servicemen. But the experience of millions of women earning their own wages in skilled industrial work changed expectations that would resurface in the 1960s.

Around 120,000 Japanese-Americans, two-thirds of them US citizens, were forcibly relocated to internment camps under Executive Order 9066 (February 1942) on the grounds of unproven security risk — one of the worst civil-rights violations of the war. Mexican-American workers came north under the 1942 Bracero Programme to fill agricultural labour shortages. Native Americans served in the armed forces in proportionally higher numbers than any other ethnic group; Navajo ‘Code Talkers’ transmitted unbreakable battlefield codes. Rationing of petrol, sugar, butter, meat and clothing reached every household. Around 17 million victory gardens supplied roughly 40% of the nation’s vegetables by 1944.

A Different America in 1945

By the time Germany surrendered in May 1945 and Japan in August, the United States had been transformed. National income had roughly doubled. The federal government, which had taken in $7 billion in 1940, took in $50 billion in 1945. The USA emerged as the world’s leading industrial and military power, the only major combatant whose territory had not been bombed. Roosevelt himself died in office on 12 April 1945, weeks before victory in Europe. His successor, Harry Truman, would inherit an economy and a political settlement reshaped by the war and the demands of the millions of Americans who had served, worked or fought in it.

Key Fact

Federal spending rose from $9 billion (1939) to $98 billion (1944) — about twenty times the New Deal’s peak. Conscription removed 12 million men from the unemployment count. The combination of vast deficit spending and the war economy ended the Depression.

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