Rationing, Taxes and Concentration Camps: America’s World War II Homefront

In the debates over America’s role in World War II, non-interventionists warned that with war would come increases in the size of the government and the powers of the presidency. Such growth, they said, would result in more social regimentation and experimentation at the hands of President Franklin D. Roosevelt and his New Dealers. In this prediction the New Dealers concurred, although they unsurprisingly viewed the possibilities of increased wartime powers more favorably than their opponents did.

Despite the popular perception that World War II was an era of unparalleled national unity, the rift between liberals and conservatives that existed before the war extended all the way through it. This acrimony was exemplified by Roosevelt speechwriter Robert Sherwood, who opined shortly after America joined the war that conservatives’ political beliefs disqualified them from important wartime positions. Sherwood wrote, “It is all right to have rabid anti-New Dealers or even Roosevelt haters in the military…but I don’t think it is appropriate to have them participating in an effort which must be expressive of the President’s own philosophy.” In historian Thomas Fleming’s estimation, “Sherwood was saying that it was all right to let the conservatives do the fighting and produce weapons of war, but the New Dealers intended to control the ideas.”

By saying that the war effort would be “expressive of the President’s own philosophy,” Sherwood meant that the war should be fought to advance New Deal ideals. And while Roosevelt’s opponents battled the New Dealers over how and for what it would be fought, the war ultimately led to the unprecedented increases in government power that the non-interventionists had predicted.

The War Bureaucracy

After his election in 1933, Roosevelt wasted no time putting his belief in government solutions to the test. To aid his restructuring of the economy Roosevelt created what came to be known as his alphabet agencies, newly created bureaucracies with abbreviations like NRA, PWA and TVA. These agencies existed to animate the centralized plans of Roosevelt and his Brain Trust, a group of well-educated and generally well-intentioned social tinkerers that designed much of the New Deal. Despite very little success in bringing the Great Depression to a close, Roosevelt greeted the gathering war clouds of 1940 and 1941 with more of his characteristic faith in government action. As dozens of federal agencies either sprang to life or shifted focus to deal with the problems of war production and mobilization, it became clear that World War II was going to be an extension of the New Deal mentality.

Even before Pearl Harbor, there were indications that these new agencies were, like the peacetime New Deal, susceptible to political influences. Roosevelt, never shy about using federal programs to buy votes, leveraged his administration’s burgeoning war economy as he ran for an unprecedented third term in 1940. While simultaneously promising to keep the United States out of war, Roosevelt advertised new defense jobs to voters in important cities like Boston, Buffalo and Seattle. Elaborating on his strategy to Treasury Secretary Henry Morgenthau, Roosevelt remarked that “These foreign orders mean prosperity in this country, and we can’t elect a Democrat Party unless we get prosperity.”

This mentality seemed to highlight a major shift in Roosevelt’s attitude towards the business community, a group that he had routinely vilified throughout the previous decade. When the economy, in spite of unprecedented New Deal spending, took a downturn in late 1937, a paranoid Roosevelt told his cabinet that it was the result of “a concerted effort by big business and concentrated wealth to drive the market down just to create a situation unfavorable to me.” Roosevelt clearly distrusted businessmen, and the feeling was mutual. But with war looming, Roosevelt realized that he could not increase war production to the needed scale and still treat the business community so contemptuously. Once war came, remarked Fleming, “Franklin D. Roosevelt, the designated leader of the New Deal…put the big-business executives he had condemned as economic royalists in charge of winning the war.” Roosevelt justified his change of position by saying that “Dr. New Deal” had been the physician America needed in the 1930s, but it was now time for “Dr. Win-the-War.”

To journalist John T. Flynn, this new coordination between centralized government and big business bore an uncomfortable similarity to the fascist economy of Benito Mussolini’s Italy, which Roosevelt had admired in the 1930s. Flynn wasn’t the only person bothered by this new state of affairs. Staunch New Dealers still despised businessmen and persisted in their attempts to use new wartime powers to extend their progressive platform.

In one instance, the Board of Economic Warfare, an agency created to negotiate raw material purchases with foreign governments, tried to regulate foreign producers’ working conditions and intentionally overpaid for raw materials in the hope that the extra money would trickle down to the to the workers. At the rival Reconstruction Finance Corporation, head man Jesse Jones, a former Texas banker turned bureaucrat, condemned the BEW’s behavior as a hopeless boondoggle by “socialist-minded uplifters.” Problems of inter-agency squabbles and overlapping authority, a familiar and not always unintended feature of Roosevelt’s bureaucracy, plagued the war effort for the duration, as government agencies battled not only foreign enemies, but also each other.

The Planned Economy

The New Dealers’ understanding of the government’s wartime powers was articulated a year after Pearl Harbor by Harry Hopkins, a close Roosevelt aide who in December 1942 wrote an article for American Magazine ominously titled “You Will Be Mobilized.” Hopkins wrote of “forced savings,” limited spending and government direction that “will affect every detail of our daily lives.” He continued, “We should not be permitted to ride on a train, make a long distance telephone call, or send a telegram without evidence that these are necessary,” with necessity being determined by the government. In the face of these attitudes, Lieutenant General Brehon B. Somervell complained that Roosevelt’s alphabet war agencies were a plot by “the leftists” to use the war “to take over this country.”

The task of mobilizing the country’s resources (and, by extension, controlling “every detail” of Americans’ lives) fell to the War Production Board. Headed by former president of Sears Roebuck, Donald Nelson, the agency had ultimate responsibility for the entire war effort and assumed a concomitantly large amount of control over the economy. Historians Burton and Anita Folsom summarized some of the agency’s activities, writing

The War Production Board halted all construction projects that were not essential to the war effort, and it decreed what was essential. It directed the conversion of civilian industries to meet wartime needs, allocated scarce materials, and decided what services to the public would be curtailed. It rationed heating oil, gasoline, metals, rubber, paper, and plastic. The WPB’s clothing section even regulated the amount of fabric that retailers could use per garment, avoiding wasteful styles such as long, full skirts for women.

In the sea of wartime bureaucracy, wrote the Folsoms, the WPB became “one of the most powerful agencies ever established by Franklin Roosevelt,” a kind of capstone to the New Deal.

Rationing in particular became a major effort of the WPB and other agencies. The first attempt at rationing came in the first half of 1942, as German submarines began sinking American merchant ships off the East Coast, resulting in gasoline shortages along the eastern seaboard. In response, the Office of Price Administration – which had the authority to set prices on consumer goods, housing and raw materials – restricted gasoline purchases in over a dozen eastern states. But soon, shortages of rubber, another material needed for war production, caused gasoline rationing to go national, as the government reasoned that if people couldn’t drive, they couldn’t wear out their rubber tires.

Rationing quickly spread into other areas of the economy. Food rationing restricted how much meat, cheese, butter and sugar Americans could purchase, creating in the process marketing opportunities for food companies who produced unrationed products like cereal. Many other products were simply eliminated from production. After February 1942, no civilian automobiles were made until after the war was over. Manufacturers of radios and other appliances completely converted their operations to war production, forcing companies to advertise not what consumers could currently buy, but what would be available after the war. Towards the end of the war, Admiral Corporation, a manufacturer of radios and other electronics, even created a promotional pamphlet of what it planned to produce once peace came. Thanks to the war and Roosevelt’s planners, American consumers could neither have nor eat their cake.

The wartime rationing gives lie to the postwar claim that the increased government spending of World War II pulled the country out of the Great Depression. This claim has been thoroughly debunked by historians Robert Higgs and Burton Folsom, who point out that while unemployment may have plummeted due to the drafting of millions of men into the armed forces, this could hardly be considered a positive proposition for those whose new jobs included being shot at. But even for Americans who stayed in the relative safety of home, the alleged economic boom was illusory. More people were employed, but there was nothing to buy.

Complicating the rationing were the OPA’s price controls, enacted in an attempt to avoid the same kind of inflation that devastated the American economy following World War I. To combat rising prices, which were in part due to the rationing and shortages, the OPA put price ceilings on goods ranging from food to housing. The agency, wrote the Folsoms, “issued more than 600 rent and price regulations on more than 8 million articles…” This exacerbated the problem, as producers of some commodities, particularly food, refused to market their products at arbitrarily low prices. Predictably, this led to a boom in black market purchases, which required a taxpayer-funded army of OPA officials to investigate and prosecute the offenders. Shipbuilder Henry Kaiser ran afoul of these regulations when he bought black market steel to keep up his rate of warship production, but his contribution to the war effort was so important that the government looked the other way. Less prominent individuals were not so lucky.

Government and Labor

The government also assumed greater control over labor. Paul McNutt, head of the War Manpower Commission, looked at the military draft and wondered why the same principles couldn’t apply to labor. In 1943, McNutt asked for the authority to, in Fleming’s words, “draft workers and shift them from New York to California or Texas at his decree.” McNutt was rebuffed in this request, partially due to a Senate investigation that contradicted McNutt’s claims to the necessity of this authority. Undeterred, McNutt placed a freeze on 27 million American workers, restricting them to their jobs unless a transfer would benefit the war effort. The Folsoms noted that the result of this regulation was that “There was little unemployment, but also little freedom and few choices.”

Throughout the war, the New Dealers remained committed to one of their most loyal constituencies, labor unions. Roosevelt had elicited from the unions a promise not to strike in return for setting up the War Labor Board to mediate disputes between labor and business, the implication being that a New Deal agency could be relied upon to generally settle disputes in the unions’ favor. The WLB instituted a “maintenance of membership” rule, which in Fleming’s words meant that employers not only had to “accept the concept of the closed shop, but to threaten any employee with dismissal if he or she refused to join the union.” When Sewell Avery, head of mail order company Montgomery Ward, refused to comply with these demands in the spring of 1944, he was literally carried out of his office by soldiers and the company was taken over by the federal government. As the soldiers removed Avery, he hurled epithets of “You New Dealer!”at Attorney General Francis Biddle, who was directing events on the scene.

The takeover of Montgomery Ward, the Folsoms observed, was the 16th time “the president had ordered the U.S. Army to seize private property during a wartime labor dispute, but this time circumstances were different. Montgomery Ward was not manufacturing aircraft or bullets or landing craft, essential to victory.” The government’s takeover in this case was a politically motivated sop to the unions. The Denver Post, aghast at this overreach claimed that “Hitler’s thugs…never did a more efficient job.”

Taxes and Withholding

More fundamental than all these issues was the basic problem of how to pay for the war. While the government ran war bond drives in which citizens were encouraged to buy as many government bonds (that is, give as large loans to the government) as they could, the primary source of income for the government was the tried and true tactic of increased taxation. In October 1942, Roosevelt announced that all incomes over $25,000 (over $300,000 in 2015 dollars) would be taxed at 100 percent. When asked how he was feeling, comedian Jack Benny remarked “I feel like a million dollars,” quickly quipping, “Well, I feel like $25,000. You can’t feel like a million dollars anymore.”

Roosevelt’s executive order capping salaries was quickly reversed, but the battle to raise taxes was a persistent feature of the home front during the war. The value of personal exemptions declined 60 percent, from $2,500 per person to $1,000, while the lowest tax rate nearly quintupled, from four percent to 19 percent. At the other end of the spectrum, taxes on top incomes exceeded 90 percent while businesses paid up to that rate on what the government defined as “excess profits.” Even these rates weren’t enough for Roosevelt. Revealing that Dr. New Deal hadn’t totally closed up shop, Roosevelt complained that a 1943 tax bill that didn’t raise tax rates further was “a tax relief bill providing relief not for the needy but for the greedy.”

While the amount of money being taken from workers was increasing, the most significant change came in how taxes were collected. Beginning in 1943, employers began withholding taxes from their employees’ pay and sending the taxes directly to the federal government, rather than taxpayers calculating and paying their tax bills annually. The new method of withholding not only got the money to the government more quickly, it obscured the extent of the tax burden from taxpayers.

The effect of these changes in the tax code was massive. Due to the reduction of the personal exemption, the number of Americans paying taxes ballooned from four million in 1940 to 39 million in 1942. By the end of the war, 65 percent of Americans were paying income taxes, 13 times higher than the 5 percent that had paid income taxes before it. “The income tax,” wrote Higgs,  “previously a ‘class tax,’ became a ‘mass tax'” during the war. Senator Happy Chandler of Kentucky approvingly summarized the new view of taxation, stating, “The government can assert its right to have all the taxes it needs for any purpose, either now or in the future.” For the New Dealers, the war was a golden opportunity to enact the tax policies they had always wanted. It was not surprising, then, that they objected strenuously to reductions in tax rates once the war was over.

Civil Liberties and the Japanese Internment

When it came to civil liberties, Roosevelt displayed as much concern during the war as he did before it – which is to say, none at all. Just as he had in the 1930s, Roosevelt used agencies like the IRS and the FBI to spy on and intimidate his political enemies. He was especially virulent towards his critics in the print media, frustrated that he could not censor them as effectively as he had films and radio. Among Roosevelt’s favorite targets was Robert McCormick of the Chicago Tribune, who Roosevelt routinely denounced as a Nazi sympathizer. While the right to free speech was not curtailed as much as it had been during World War I, critics of the war still sometimes found themselves the focus of federal investigations and indictment. Attorney General Biddle wrote that Roosevelt “was not much interested in the theory of sedition or the constitutional right to criticize the government during wartime. He wanted this anti-war talk stopped.”

By far, the worst violation of civil liberties was the internment of nearly 120,000 Americans of Japanese descent. On February 19, 1942 Roosevelt signed Executive Order 9066, authorizing the removal of Japanese-Americans from their homes, businesses and lives on the West Coast to internment camps further inland. To their credit, some New Dealers like Biddle opposed the move, while other liberals favored it. In theory, the evacuation of these Americans was due to fears of a Japanese invasion of the West Coast, but it was unclear how exactly a minuscule minority was supposed to be able to overthrow the government or pave the way for a Japanese invasion. Even in the panic-stricken weeks following Pearl Harbor, this was a clear impossibility. Such concerns were further mitigated when FBI chief J. Edgar Hoover reported that his spies detected no disloyalty among Japanese-Americans.

But calls for internment still resounded in Washington. Representative John Rankin of Mississippi summed up the racist hysteria behind the push when he stated bluntly, “Once a Jap, always a Jap.” In Rankin’s mind, “You can’t anymore regenerate a Jap than you can reverse the laws of nature.” Such racism towards the Japanese was prominent in western states before the war and would be a prominent feature of war propaganda for the duration. The fact that Japanese-Americans competed with whites for jobs didn’t help matters. One western labor leader said that the matter boiled down to “a question of whether the white man lives on the Pacific Coast or the brown man.” California Attorney General Earl Warren, later a famously liberal U.S. Supreme Court justice, said that “when we are dealing with the Caucasian race we have methods that will test the loyalty of them… But when we deal with the Japanese we are in an entirely different field and we cannot form any opinion that will be sound.” The old stereotype of Asian inscrutability was apparently guiding American policy.

Not all Americans approved of the internment. Russell Kirk, who would later play a leading role in the resurgence of the postwar conservative movement, wrote to a friend in 1942, “We have indeed become a government of men and not laws. Without legislation…the army and the bureaucracy can force hundreds of thousands of citizens into the desert west of the Sierras, without even compensation.” To Kirk, wrote his biographer Bradley Birzer, “the interment of Japanese Americans [was] the logical consequence of nationalism (liberal or conservative) and progressivism,” of which Roosevelt was the standard bearer. Kirk later asked sarcastically, “[when] thousands of American civilians of Japanese descent were thrown into ‘relocation centers,’ without any charges against them, how many liberals protested?”

Roosevelt, who enjoyed labeling his opponents as Nazis and Nazi sympathizers, again found himself implementing a policy that would have been comfortably at home in the fascist European nations. The internment camps were not dissimilar to camps that would be liberated in Europe at the end of the war. The Folsoms observed that Japanese-Americans

were taken to remote compounds, fenced in with barbed wire, and watched by armed sentries with searchlights, and sometimes machine guns. In those one-square-mile compounds they were lodged in flimsy pine barracks with thin walls, community bathrooms, and porous floors, which let in swirling dust and sand both day and night.

The comparison to German concentration camps has its limits. Clearly, the degree of barbarity towards Japanese-Americans did not come close to equaling what was happening in Europe. Yet, the Japanese internment was closer to Nazi tactics than traditional American liberty. Without being charged with a crime, much less being given the traditional right to a trial, over a hundred thousand Americans were imprisoned. When they were finally released towards the end of the war, they returned home to find their property confiscated, their homes vandalized and their fellow westerners as hostile as ever to their presence.

The Wartime Transformation

Following the war, sociologist Robert Nisbet observed that “it is in time of war that many of the reforms, first advocated by socialists, have been accepted by capitalist governments and made parts of the structures of their societies.” Professor Bruce Porter was more blunt, writing, “a government at war is a juggernaut of centralization determined to crush any internal opposition that impedes the mobilization of militarily vital resources. This centralizing tendency of war has made the rise of the state throughout much of history a disaster for human liberty and rights.”

While World War II wasn’t the first war to exhibit these tendencies, neither did it break the trend, nor were its deleterious effects confined to the economy. Historian Richard Pollenberg observed that

World War II radically altered the character of American society and challenged its most durable values. The war redefined the relationship of government to the individual and of individuals to each other, and it posed questions about the relationship between civilians and the military, between liberty and security . . . which continue to perplex Americans.

In the aftermath of the war, it was forgotten that the non-interventionists presciently, if incompletely, predicted these results. Embroilment in a world war would, they said, have a centralizing effect on government power, and especially the powers of the president. For people concerned with preserving American ideals of social tradition, limited government and separation of powers, these were no small concerns.

The non-interventionists’ warnings went unheeded in their day, but are almost entirely forgotten in ours, despite that, to a substantial degree, they were correct. The powers given to Roosevelt to meet the war emergency would continue to be used by his successors after it, when the emergency was over. The size and power of government, and even tax rates, would never return to prewar levels. “The political issues that FDR and [Harry] Truman launched during the war,” wrote the Folsoms, “have dominated the political arena for two generations,” with no end in sight.

Whatever can be said in favor of World War II, it cannot be denied that its long-term effect at home was to strengthen the state at the expense of the individual, an unconservative and illiberal outcome by any measure.

Note: This article is part of a series on World War II. Click here for the complete series and here for a selected bibliography

(Cover photo courtesy of history.com)