Wayne Biddle
Wayne Biddle

Fellowship Title:

Cold War Resartus

Wayne Biddle
August 26, 1990

Fellowship Year

Whether or not the endless winter of menace known as the Cold War is actually over, it already seems bracketed in history. At the beginning was competition between Washington and Moscow for politico-economic control of a destitute Europe, lethalized by the spread of atomic bombs. At the end was rebirth of pre-World War II European nationalism, occasioned by Soviet and American economies too exhausted or debt-ridden to maintain the old fever-pitch contest. In between were some of the century’s nonsensical grotesqueries: McCarthyism, Quemoy and Matsu, the Berlin Wall, Star Wars. The only constant was the atom bomb.

The bombs, of course. are emblematic of an armaments industry that has come to feel as second-nature to many Americans as television and computers. That the United States did not possess a constantly replenished arsenal before the Cold War has been lost from common memory. Indeed, the popular assumption that the modern weapons business grew solely as a military response to the Soviet threat–hence “defense” industry–is taken so much for granted that an examination of what the founders of that industry were saying before there was such a thing as a Cold War can he disquieting.

For example, in February, 1943, with the outcome of World War II still totally uncertain, the chairman of Lockheed Aircraft Corporation addressed the annual meeting of the Los Angeles Chamber of Commerce. Robert E. Gross, scion of a Boston family whose fortune had been made in the domestic coal business, had acquired Lockheed for $40,000 when it was bankrupt in 1932. Through shrewd stock manipulations, the introduction of a successful transport plane and lucrative military orders from the American and British governments, Gross had lifted the company to its wartime status as one of the premier American munitions manufacturers. He was a leader of the Southern California business community, and the 1,200 executives gathered at the Biltmore Hotel took his word as gospel.

Before Gross was introduced, the president of the L.A. Chamber of Commerce, right-wing extremist Frank P. Doherty, warmed up the audience with a warning about what might happen if the Roosevelt Administration’s “obstructionist” economic policies were not curtailed. “The road to the left is not a road forward, but rather a road back, the road over which we came after centuries of toil, tears and blood,” he said. Making a rather wild reference to the Revolution, he declared that “we abandoned the state economic system a little over 150 years ago and, taking the road to the right, have achieved freedom of endeavor, of speech, of press, of education, of assembly, and the highest standard of living the world has ever known.” Assailing FDR’s New Deal as “social planning by men who never met a payroll and never paid a dividend,” Doherty declared that “if Government makes it clear at this time that obstructionism is to be removed to make it easy to transact business and end fear of Government control, free enterprise can do the job of meeting all postwar problems.”

Into this atmosphere stepped Robert Gross, a richly tailored (he sent his shirts to London for laundering) and urbane darling of Boston-Harvard society. He, too, stressed that postwar prosperity depended upon a “return of freedom” to free enterprise. Vis-à-vis Europe, “we must be prepared to industrialize our Allied countries now receiving lend lease, so that they can cooperate with us and trade with us. It is wrong to believe that countries must be kept down to be good markets. Our best customers prior to the war were our biggest competitors, including England, Germany and Japan. I hope that we will not accept the theory that we must reduce our standards to the standards of other countries in order to compete successfully.” Free enterprise could not fulfill its obligation to furnish employment after the war “unless we are given a background of freedom upon which to do it,” he concluded, echoing Doherty.

Here, then, was the seething resentment of the New Deal’s economic policies, which were cast as a left-wing plot to subvert cherished American freedoms. Businessmen of Gross’s stature already foresaw that European markets would be up for grabs after the war, with an attendant necessity for the United States to control those markets through re-industrialization–hence, the Marshall Plan. Gross had a personal stake in such aid, since Lockheed’s meteoric rise during the 1930’s had been fueled by sales of transport aircraft throughout Europe, including Poland, Hungary. Romania, Yugoslavia, and Czechoslovakia.

It would not take long for this anti-Roosevelt sentiment to transform into the Cold War’s xenophobic anti-Communism, which was consciously used by business leaders to put a brake on New Deal programs. Soon after the end of the war, for example, Glenn L. Martin, who had been a remarkably apolitical figure in the warplane industry since its earliest days, adopted the rhetoric of the far right. “Besides being in the midst of a world upheaval, America seems to be in for its share of revolution also,” he wrote in March 1946 to the editor of the Salina, Kansas, Journal. “The so-called labor movement in the United States appears to be a lot more significant than just getting more money for men–it appears that the propaganda that has been going on for a good many years has led many thousands of our people to believe that some new form of government is necessary from here on out. Whether we have a socialistic or communistic state in the United States is yet to be determined.”

Behind such hysteria was the fact that, in 1946, Martin faced a shake-out in the American commercial aircraft business. A series of mismanaged attempts to sell new passenger planes would soon bankrupt his company despite healthy income from military work, forcing him to trade his position as founder and president for a federal bail-out organized by the Navy. In August, 1946, he had the following telephone conversation with Hubert J. Soher, a Wall Street broker who specialized in Martin and other aircraft stocks. Soher knew how dependent the industry was on weapons contracts, but he was skeptical about how much of a real threat the war-ravaged Soviet Union represented to the West.

S: Are you getting much in the way of war (weapons) business?

M: Yes, we are. Our war contracts are increasing–our War Department business is going right along. As a matter of fact we’re talking about more business now than we originally planned we would get. It runs into a good many millions of’ dollars. We’ve got about eighty million or more Government work that we’re negotiating.

S: Is that right? Tell me, does this Russian situation look serious or not?

M: I think it does. You see, we’ve got this World Court, but every question is voted 6 to 15–Russia and her satellites 6 votes and the opponents 15 votes. That’s the way it goes every time, so there’s a cleavage of purpose. The Russians know that they can never get their way in the World Court, and I’m positive that they plan to fight if they find it advantageous. I know–I can’t tell you how I know-that they are working night and day in increasing their armament and their design of new equipment.

S: The Russians are?

M: The Russians are working on missiles and all of the latest weapons–are going forward with great pressure.

S: Well, are we doing the same?

M: Not too vigorously.

S: In other words, we’re lapsing into prewar status.

M: That’s right. We’re getting ready to throw away our guns.

S: Now, getting back to one other thing and then I won’t bother you anymore. The dividend doesn’t look so good, does it?

Glenn Martin, Robert Gross, and every other leader of the airplane industry knew that without steeply rising profits from military contracts, their dividends were in dire straits. None of them, not even Donald Douglas with his popular reputation as a commercial transport star, could thrive without more weapons work. There is profuse evidence that they cultivated the paranoid psychology of the Cold War to insure the survival of their companies–the “permanent war economy” insured by Congress that General Motors president Charles E. Wilson had advocated back in 1944 (Wilson later became Dwight Eisenhower’s Secretary of Defense).

By the end of the 1940’s, Gross made no bones about what the Government’s duty was in supporting the aircraft industry. A number-one air force was necessary for adequate defense, he told the Kansas City Advertising and Sales Executives Club during a March 1949 speaking tour. Without adequate defense, “the Russians could move in and make away not only with the actual Marshall Plan but also with everything for which the Plan stands.” As for the cost of defense, he added, “we can spend ourselves into Communism or we can two-bit ourselves into communism by not spending enough to prevent the Commies from taking over.” Some 29 million dollars a year was spent on airplanes from 1920 to 1939, he claimed, but from 1939 to 1944 the Government spent 29 million dollars a day for planes “in order to dig out of that hole.”

“We can’t go back to that,” he insisted. “It isn’t up to the manufacturers to say what size air force shall be maintained–that’s up to the citizens. But we manufacturers want steadiness in government appropriations so there will be steadiness in the air force.” And steadiness in dividends, he did not need to add. By 1952, the Defense Department had investments estimated at four times the book value of all manufacturing corporations in the United States. By 1967, the Labor Department figured that over ten percent of the entire American labor force owed their living directly to weapons contracts. That same year, the President’s Economic Report stated baldly that “the expansion of defense spending contributed to a significant change in the climate of public opinion,” assuring businessmen that “no economic reverse would occur in the near future.”

Gross went on to become a prominent fund raiser for Republican politicians during the 1950’s, helping to cement Southern California’s ties to right-wing candidates. The region was well served by these associations throughout the Cold War, garnering the lion’s share of Pentagon aerospace contracts from the early days of ICBM production through Star Wars and the Stealth Bomber. Nowadays, aerospace industry leaders rarely make such politically loaded pleas for Government money as their forebears did during the late-1940’s. They don’t have to. But if the Cold War truly fades in the 1990’s, or if the Bush Administration fails to re-tailor anti-Communism into a new rubric that will sustain the aerospace giants, then they will take aim once again at Congress and the public with the rhetoric of financial desperation. As Grumman Corporation discovered last year when it successfully opposed the wishes of the Navy, the Secretary of Defense, and the President to cancel production of 1969-vintage F14 fighter planes, this well-worn path can still be very rewarding.

©1990 Wayne Biddle

Wayne Biddle, a freelance writer, is researching the origins of America’s defense industries.

Wayne Biddle
Wayne Biddle