Establishment of the Priorities System
The expansion of productive facilities, as just described, was the most urgent problem faced by the Army at the beginning of the defense period. But long before the facilities problem had been resolved, it was overshadowed by a more fundamental problem--the task of organizing production throughout the economy to meet the requirements of a huge rearmament program, unprecedented in both urgency and magnitude. Very early in the program it became evident that the basic ingredient of production control was the channeling of productive activity at all levels of the economy into the output of the materials, parts, and finished products needed for the nation's defense. Although the measures adopted to achieve this result were often referred to as "material controls," they were also "production controls." Materials, like finished products, had to be produced, and most of them had to be produced within the United States. Moreover, under certain control systems--particularly the priorities system-- the term "material" came to be all-embracing, including even end products.1
Scarcely had the Army's Munitions Program been launched in the summer of 1940 when the first material shortages made their appearance. Among the more noticeable early shortages were such items as cotton, flannel, and linen for uniforms, clothing and bedding; cotton duck and webbing needed for tentage, tarpaulins, and the numerous other canvas requirements of the armed forces; aluminum in various shapes and forms, indispensable to the tremendous aircraft program; and special alloy steels for armor plate and armor-piercing projectiles. Most of these items were semifinished materials and the immediate bottleneck to their production in adequate quantity was a shortage of equipment, such as textile looms and metal rolling capacity, rather than basic raw materials.
As contracts were placed in increasingly large numbers, the shortages spread both vertically and laterally throughout the industrial community. They soon included raw and crude materials at the base of the productive process; fabricated and semiprocessed items at intermediate stages; and complex parts and components (instruments, gages, motors, generators, compressors, and the like) required for the expansion of industrial capacity as well as for incorporation into military end products. A serious handicap to war production at all levels-- whether in raw material, component, or endproduct production--was the drastic short____________________