War Orders and Decentralization

Report Outline
Distribution of Defense Program Contracts
Centralization of American Industry
Proposals to Farm Out Defense Orders
Special Focus

Distribution of Defense Program Contracts

Because speed has been considered the prime requisite in placing defense contracts, it was inevitable that the bulk of contract awards during the early months of the national defense program should go to areas where manufacturing facilities of the types required to turn out war materials were already in existence.

The predominantly agricultural sections of the Middle West have consequently received a relatively small volume of contracts to date in proportion to their population. On January 15, a Midwest Defense Conference meeting at Kansas City, Missouri, adopted resolutions directing attention to the fact that in awards made up to December 15, 1940, Arkansas, Iowa, Kansas, Missouri, Minnesota, Nebraska, North Dakota, Oklahoma and South Dakota had received contracts amounting to only $15.59 per capita, while the national average was $73.37 per capita. The more highly industrialized states of the North Central region have also received less than the national average of defense contracts, either in proportion to population or in proportion to existing manufacturing facilities. On the other hand, the Middle West has received more than half of all contracts awarded by the Army and Navy for plant expansion, construction and equipment, reflecting a definite policy of building new facilities away from either the Atlantic or the Pacific seaboard whenever possible.

Total contract awards by the Army and Navy amounted on January 31,1941, to $11,339,129,838, of which $1,051,581,989 were awards for plant construction and expansion. The following table shows the distribution of these awards by census regions. The first column shows the distribution of the country's previously existing plant capacity, as indicated by figures for “value added by manufacture” given in the 1939 Census of Manufactures.