"If it is a critical material that would be of value to the enemy, there is no way to measure in dollars and cents its value to us."
-- Jesse H. Jones

America and Jones Prepare for World War II --
Building the "Arsenal of Democracy"

In the spring of 1940, as France and Britain struggled against Germany's Third Reich, it was apparent to President Roosevelt and his cabinet that the U.S. was ill prepared for a coming war and its allies desperately needed help.

Isolationism was still a great force in the nation, and many were determined to keep the U.S. and its aid policies out of the war. By the time Roosevelt and Congress put in place the means to begin rearmament, Hitler had control of nine European capitals -- Paris, Vienna, Prague, Warsaw, Luxembourg, Copenhagen, Oslo, Brussels and Amsterdam. In June 1940, Congress granted some of the broadest powers ever conferred on a government agency when it gave the Reconstruction Finance Corporation (RFC) almost limitless powers to do practically anything the defense and war-making authorities in Washington thought best for preparation of war.

The Act of June 25, 1940 authorized the RFC to buy or build anything the President defined as strategic or critical. Roosevelt had called upon the RFC to bring the country out of the depths of the Great Depression. Now, he turned to the agency to stockpile essential materials, build plants, shipyards and pipelines and pay subsidies to hold down prices and obtain other necessities.

These initiatives could only be executed by Jesse H. Jones, with the approval of the President. In 1939, Roosevelt had appointed Jones Federal Loan Administrator. In this new position, he was responsible for supervising all government lending agencies, including the RFC. In the summer of 1940, Jones joined the cabinet as Secretary of Commerce. Unwilling to give up his post as Federal Loan Administrator, Congress passed special legislation authorizing Jones to retain two federal posts at once.

After granting these sweeping powers to the RFC to deal with war preparation, it was no surprise that some members of Congress were concerned about the amount of power they had vested in one man. Senator Robert A. Taft said, "Jesse Jones under this bill could lend a hundred million dollars to a borrower for a hundred years at any rate of interest he chose." To which Senator Carter Glass replied, "Yes, he could but he won't." Jones had gained much respect on Capitol Hill for his efficient handling of the RFC's programs during the Great Depression. Preparing America for war was a monumental undertaking. Jones put himself and the RFC to work at once.