"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
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
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.