JESSE JONES ON WARTIME PRODUCTION OF SYNTHETIC RUBBER

 

[One of the greatest economic challenges faced by the nation in wartime was assuring an adequate supply of rubber.  In his memoirs Jesse Jones, Roosevelt’s Secretary of Commerce from 1940 to 1945, recalled how this challenge was faced.]

 

The American rubber program, which produced more than 700,000 tons in 1944, was operating at a rate in excess of 1,000,000 tons a year when the war ended. Compare those figures with the accom­plishments of the Germans. Prior to the war the Germans were generally conceded to possess greater knowledge of synthetic rubber production than any other people. During the war their supplies of natural rubber were so extremely limited that they had to rely almost entirely upon their synthetic production. When their rec­ords became available after the surrender, we learned that their annual production never rose above 109,173 tons, that peak having been reached in 1943.

 

We handled the rubber situation, both natural and synthetic, in a businesslike way and got results. As a contribution to winning the war, our accomplishments in less than two years in the rubber field will stand comparison with those of any other industry. At the start we did not have the knowledge, but we went out to get it, and did, just as we did in many other fields....

 

Altogether, fifty-one government-owned plants were designed, constructed, and put in operation. In carrying out the program, forty-nine rubber, chemical, petro­leum, and other industrial companies par­ticipated under the supervision of Rubber Reserve Company....

 

Our investment in these plants approxi­mated $700,000,000. When the program really got going, expenditures for ma­terials, utilities, services, etc., ran around $2,000,000 per day. All these plants were constructed under the auspices of … [the] Defense Plant Corporation, which leased them to the various operating com­panies at a nominal rental of one dollar per year. Nearly all of them were oper­ated on a cost-plus-management-charge basis.

 

Since alcohol and petroleum were the principal feeder bases, the plants were built convenient to the sources of those raw materials. Twenty-one plants were in the east central states, twenty-three in the Southwest, principally in Texas and Lou­isiana. The remaining seven were in southern California.... Of the cost of produc­tion, 86 per cent went for materials. For alcohol more than $500,000,000 was spent, and for petroleum more than $100,000,000. It was the predominant importance of petroleum in synthetic rubber produc­tion that motivated placing nearly half the nation's capacity in the Gulf Coast area of Texas and Louisiana....

 

However, the whole net operating def­icit of the plants up to December, 1948, had amounted to only $33,481,000.... The big loss--nearly $250,000,000--was for depreciation of the plants. Yet that was a very small price to pay for synthetic rubber's contribution to the victory and its guarantee that our country shall never again be wholly dependent on distant sources for its supply of such an essential article.

 

During the war the whole huge enterprise was administered by Rubber Reserve Company with a personnel of fewer than 300 directly assigned employees. On V-J Day there were about 24,000 em­ployees engaged in operating the plants. Although they were working with new processes and sometimes with strange ma­terials and machinery, they were credited by the Department of Labor in the last year of the war with the third best acci­dent prevention record in the nation.