Perhaps the most controversial feature of the priorities system from its inception in the summer of 1940 until well after Pearl Harbor was the role of the so-called Critical List. This feature exerted a profound influence upon the development of the priorities system. It created considerable friction between the armed services and the early priority-control agencies, and was an important factor in the later insistence of the services upon the adoption of a vertical system of material controls. A consideration of the various issues surrounding the development and application of the Critical List goes to the heart of the problem of organizing production controls in a complex industrial economy.1
The exact origin of the Critical List is shrouded in considerable mystery. In order to trace its beginnings it is necessary to go back to the eight-week period between 17 June 1940--when the ANMB Priorities Committee was appointed and 12 August when the new priorities system was announced. Under its 17 June mandate from the Assistant Secretaries, the Priorities Committee had proceeded on the assumption that the purpose of a priorties system was to insure, so far as possible, the production and delivery of procurement items in order of their strategic importance or urgency. This meant that an item assigned a given priority rating must have a superior claim, as against lower rated items, upon a manufacturer's facilities and upon all contributory materials or services from whatever source needed by the manufacturer and his suppliers to produce the completed item. All this had been contemplated by priority proposals under industrial mobilization planning in the interwar period.
Accordingly, the committee's first draft of the proposed new system ( 10 July 1940) provided that priority ratings assigned to prime contracts could be automatically "extended" to successive subcontracts or orders all down the contractual chain, thus requiring preferred treatment of all items contributory to the prime contract: "This priority rating, if necessary, may be automatically extended to materials, services, machine tools, related, production machinery, equipment, and supplies essential to production and the scheduled completion of these contracts."2 To implement this purpose the____________________