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March 15, 2000
Getting in the Scrap: the Salvage Drives of World War II
Preliminary: Please Do not Cite or Quote Without Permission
Hugh Rockoff
Department of Economics
Rutgers University
New Brunswick NJ 08903-5055
732-932-7857
Rockoff@econ.rutgers.edu
Abstract
During World War II Americans were asked to
salvage a long list of materials for the war
effort including paper, tin, iron and steel,
rubber, and even silk stockings and cooking
fat. Stories about the salvage drives have
become a staple in both popular and scholarly
histories of the home front, and in film
documentaries, because the drives appear to
illustrate the potential importance of non-
economic motives such as patriotism and
community spirit. Here I reexamine the major
drives, especially the iron and steel and
rubber drives. Despite the propaganda that
accompanied them, the drives were able to
increase scrap collections only by relatively
small margins above what would have been
collected during prosperous peacetime
periods. The impact of the familiar calculus
of profit and loss, and the impact of the
maneuvering of special interests for
advantage, moreover, can be seen at every
turn. It turns out that the scrap drives, and
the propaganda and patriotism that
accompanied them, had a far more limited
impact on the economy than might be imagined
from the enthusiastic portrayal of them in
the historical literature. While the impact
of the drives on the economy was limited, the
impact of the drives on civilian morale, may
well have been substantial.
1
Getting in the Scrap: The Salvage Drives of World War
II
Economics is a very unsatisfactory science. But it
would have to be much more unsatisfactory than it is
if such an event as a war, however extensive and
destructive, sufficed to upset its teaching. (Joseph
Schumpeter 1954, 1146)
I. The Conventional View of the Salvage Drives
During World War II the public was called upon repeatedly to
salvage for the war effort: tin, aluminum, iron and steel, paper,
rubber, even cooking fat. Propaganda campaigns run by the Office
of War Information stressed the importance of the drives. In
peacetime it was just the family kitchen; now it was a
combination "frontline bunker and rear-echelon miniature war
plant." Explaining the conversion factors drove the point home.
One pound of fat contained enough glycerin to make a pound of
black powder, enough for six 75-mm shells. Twenty three hundred
old nylon stockings contained enough nylon to make one parachute.
Thirty thousand razor blades contained enough steel to make fifty
30-caliber machine guns. (Lingeman 1970, 254-55).
The salvage drives are mentioned frequently in popular
histories of the war. Film documentaries about the home front and
school textbooks seldom fail to mention them. The salvage drives
also appear frequently in scholarly treatments. One of the best
recent histories of the war is William L. O'Neill's A Democracy
at War. Although, O'Neill notes some problems in the scrap
2
drives, he lavishes praise on the Nebraska scrap drive of 1942.1
The most successful state drive yet, the Nebraska
model was widely copied, demonstrating that the will
was there and could be mobilized with inventive
planning. If the weakness of democracy was inefficient
government, the strength was volunteerism, especially
when it exploited the national love of competition.
O'Neil's comment, I believe, suggests the reason that historians
are so attracted to the drives. The stories seem to say that
something happened that could only have happened through
voluntary community action. Market incentives were not important,
and government played only an enabling role. Community spirit was
the key.
Such stories pose a familiar challenge to economic
historians. The models that economic historians normally explain
behavior as rational responses to incentives. But non-economists
challenge this approach by maintaining that these models fail to
take into account a wide variety of non-pecuniary variables such
as community spirit. Wars provide a natural test. If non-
pecuniary motives can override pecuniary motives at any time,
then surely this must be true during wars -- especially World War
II, when people were constantly being asked to lay aside their
personal interests in the interest of patriotism.
Patriotism, of course, might have influenced efforts and
decisions at many points in the war economy. We cannot
1 This drive, as O'Neill notes, made use of considerable
incentives. Prizes worth up to $2,000 in war bonds were given to
individuals and organizations who collected the most scrap.
3
investigate all of them. But if there were any events in which
patriotism was evoked on a large scale, it was in the scrap
drives. They occurred in the darkest hours of the war, when
victory appeared far from inevitable. The press and the newly
created Office of War Information explicitly made efforts to
invoke patriotic feelings. If patriotism was a potent magic that
revoked ordinary economic constraints, then surely we should
observe it in this case.
Below I will look in more detail at four drives: the old
stocking drive, the fat salvage drive, the metal drives
(principally iron and steel), and especially the rubber drive.
The questions are simple. Why were voluntary drives used to
supplement market mechanisms? How successful were the drives? And
how were the drives influenced by the economic constraints faced
by the participants? My purpose is not to denigrate the spirit of
self-sacrifice that motivated these drives, or to deny that they
had any effect. But, I do intend to challenge the idea that the
scrap drives suggest that normal economic analysis needs to be
jettisoned "for the duration."
II. Old Stockings2
Before the war silk came to the United States largely from
Japan, with smaller amounts from China and other countries. It
2 This section is based largely on Walton (1945). Walton was
director of the Textile, Clothing, and Leather Division of the
War Production Board.
4
had two important military uses: parachutes and powder bags. Its
lightweight, strength, and the ease with which it can be folded
and unfolded without leaving a crease made it ideal for
parachutes. When the War began experiments were just underway to
make parachutes out of nylon. Nylon proved superior and, as it
turned out, almost all parachutes produced during the war were
made of nylon. Silk was also used for the bags that held powder
behind artillery shells, especially in large naval guns. Silk
burned completely whereas bags made of other fibers left glowing
embers behind. Eventually, ways were found to make satisfactory
bags from cotton, wool, and rayon.
Japan limited its shipments of silk to the United States in
1941, making it difficult to accumulate stocks, and embargoed all
shipments shortly before Pearl Harbor. With silk supplies from
Japan embargoed, a salvage drive to bring in used silk (and
nylon) stockings seemed the thing to do. Indeed, silk and nylon
stocking drives arose spontaneously. One spontaneous drive in
Dallas Texas yielded some 662 pounds of worn stockings.
Unfortunately, when the war began there were no processes
available for reclaiming used silk or nylon. Experts at the War
Production Board felt that it was only a matter of time before
such processes were developed. But until proof was available, the
military would not accept delivery of used stockings. All that
the War Production Board could do was write polite letters
telling the collectors that they could not use the stockings.
(Walton 1945, 177).
5
Eventually, methods were developed for recycling worn silk
and nylon stockings. On November 15, 1942 the War Production
Board launched an official drive which was continued until March
15, 1943, when the supply had largely dried up. The drive brought
in an impressive amount of stockings, some 880,000 pounds, about
one pair for every 2.7 women.
How seriously the War Production Board took the drive
compared with its other responsibilities, however, is open to
question. On the first day of the drive the textile division
heard stories about women turning in used stockings and then
buying new ones. (Walton 1945, 178). The textile division
immediately issued a directive advising women to turn in only
stockings that were completely worn out, so that there would be
no increase in the demand for new stockings. Since at this time
new stockings were being made mainly of cotton and rayon, it is
clear that the purpose of the directive was to prevent the
possibility that some consumers would face empty shelves for new
non-nylon stockings. Obviously, had the textile division
considered the used silk and nylon to be recovered crucial to the
war effort, they would have asked consumers to turn in all
stockings containing silk and nylon, whether usable or not.3
3 Indeed, in the months leading up to the drive the textile
division had encouraged the mills to make stockings containing
silk from inventories of opened bales. Had they strongly believed
that silk was crucial to the war effort, and had they believed
that ways would be found to recover silk from opened bales or
from completed stockings, they could have commandeered all stocks
in the hands of dealers.
6
III.
Cooking Fat4
During the war women -- it was universally assumed that
propaganda aimed at the home should be aimed at women -- were
asked to save cooking fat. The fat was then exchanged at butcher
shops for red ration points and cash. The propaganda explained
that the fat so saved contributed to the war effort because fat
was the source of glycerin, a key ingredient in explosives. As
one poster put it "...fat makes glycerin. And glycerin makes
explosives for us and our allies -- explosives to down Axis
planes, stop their tanks, sink their ships." (Cohen 1991, 111)
In fact, the demand for glycerin derived from the demand for
explosives had nothing to do with the fat salvage drive. Only a
minute proportion of U.S. animal fat production was needed for
this purpose (the multiplier effect!), and munitions makers could
easily outbid rivals for this small amount.
Rather the fat salvage drive was organized and financed by
the soap makers. Soap production was high during the war by
prewar standards. (Russel 1947, 248). And fat supplies were also
relatively abundant, especially later in the war. By January of
1944, lard was so abundant that the government was having storage
difficulties. (Fantin 1947, 209). But price controls meant that
there was excess demand for soap. Early in the war
(organizational meetings for the drive began in April 1942) soap
4 This section is based on Russell (1947).
7
makers feared that if soap were rationed, then some of the
consumers forced to cut their use of soap during the war would
learn that they could do with less. Anything that could avoid the
need to ration soap would help prevent the spoilage of postwar
markets. Hence the plan organized by the soap makers, to offer
consumers red points in exchange for fat.
From the beginning there was some opposition to the plan.
The Office of Price Administration was concerned that the fat
salvage plan would produce an excess supply of ration points, and
would undermine the rationing program (Russell 1947, 239).
Indeed, not all of the fat renderers favored the plan. The
Eastern Melter's Association was opposed. Nevertheless, at a
meeting on November 22, 1943 the Office of Price Administration
agreed to pay two red points and 2 cents for each pound of fat.
The program was announced in December 1943.
The advertising drive created by the American Fat Salvage
Committee was financed by the soap makers. It was so aggressive
in linking fat salvage to military uses, that Chester Bowles, the
head of the Office of Price Administration, wrote to Lever
Brothers complaining about the misleading nature of the campaign.
(Russell 1947, 252). The campaign played no positive role in the
mobilization of resources. However, it may have had a positive
effect on the morale of people who could not otherwise find a way
in their daily lives of contributing to the war effort.
8
IV.
Metals
A variety of metals were collected during the war. One of
the first drives was for aluminum. In July 1941 the Office of
Production Management, in the midst of widespread concern about
the adequacy of the supply of aluminum for the aircraft program,
announced a two-week drive to collect aluminum cookware and other
items. The response was unforgettable: coffeepots, frying pans,
skillets, stew pots, cocktail shakers, ice-cube forms, artificial
legs, cigar tubes, watch cases, and radio parts. "In Lubbock,
Texas, a likeness of Adolph Hitler was placed in the middle of
the courthouse square as a target for the pots and pans hurled by
citizens." (Goodwin 1994, 260)
Unfortunately, it soon came to light that only virgin
aluminum was suitable for aircraft. The pots and pans collected
in the drive were made into -- pots and pans. Presumably, some of
the families that participated enthusiastically in the aluminum
drive were forced to buy new pots and pans made from the ones
they had donated. (O'Neill 1992, 131; Goodwin 1994, 260-61).
The aluminum drive, like the others, undoubtedly helped
shape public opinion and mobilize public spirit. According to
Doris Kearns Goodwin, what Roosevelt had accomplished with the
aluminum drive "was nothing less than an exhibition of the
dormant energies of patriotic democracy." (Goodwin 1994, 261).
The impression that unprecedented amounts of scrap were
collected is based on stories about the types of things
9
sacrificed to the war effort. In New York many towns donated the
cannons on the town square, some dating back to the Civil War.
And at Fort Ticonderoga, the Revolutionary War operation in which
Henry Knox retrieved the cannons for the Continental Army was
reenacted, and the cannon were donated to the scrap drive.
(Hoopes 1977, 146-47). But such stories need to be viewed in
context. Figure 1 shows iron and steel scrap purchased from
American dealers for domestic consumption and for export. The
plot can be described as a strong upward trend, punctuated by
recessions. The figure does show a local peak in the 1942. But
that peak is smaller than might be inferred from tales about
wartime scrap drives. Purchases in 1942 were only 9.04 percent
above the level of 1937 and only 3.94 percent above 1941. Part of
scrap purchases in those years was for export, much of it for
export to Japan. Purchases in 1943 were 6.63 percent above 1937,
and 1.52 percent above 1941. The wartime peaks in turn were
substantially exceeded in the early postwar years, although, it
is true, postwar salvage was made somewhat easier because large
amounts of scrap were available in the form of surplus military
equipment, ships, and industrial plant. Overall, the war years do
not stand out from other peak years. Indeed, the consumption of
scrap iron and steel during the war was actually a bit below the
peak-to-peak trend.
The iron and steel scrap drives, to some extent, merely
offset the effect of price controls on scrap collection. It may
seem surprising that scrap prices were controlled. If iron and
10
steel scrap were crucial to the war effort, why not use prices to
get in as much as possible, even if this could be supplemented by
voluntary drives? But the Office of Price Administration looked
at it differently. In their view, the important point was that
the price of scrap was a component of the price of steel, which
was in turn a strategic price in the war economy. If scrap prices
were allowed to rise it would "start an inflationary price spiral
whose consequences would have been disastrous for the
stabilization program" (Benes 1947, 8). As a result of this
focus, scrap prices were set at levels that, in a number of ways,
discouraged collection.
First, and most important, the real price of scrap was
allowed to decline in the war years. This can be seen in figure
2. The consequence was that number of small dealers, who were
normally an important part of the mechanism for collecting scrap,
"diminished sharply" (Benes 1947, 5). They were drawn into the
war industries where wages were allowed to rise substantially.
Perhaps some movement in this direction was inevitable. Many
peddlers and small dealers probably viewed the war as an
opportune moment to make a change they had long contemplated. But
the falling real price for scrap could not have helped.
The Office of Price Administration, moreover, had
considerable difficulty formulating lists of official prices for
an industry characterized by a multitude of dealers, products,
and shipping costs. Early experiments with prices controlled at
the point of delivery gave way over time to an elaborate basing
11
point system. In October 1944, a shortage of scrap loomed, and
was met by eliminating many restrictions on where, what, and to
whom dealers could sell. (Benes 1947, 19-30)
V. Rubber
The Rubber drive was the most important. Japanese expansion
cutoff the United States, and all her Allies, from their sources
of natural rubber in Southeast Asia -- sources that had supplied
ninety percent of U.S. raw rubber before the war -- raising the
specter that the United States would not have sufficient rubber
to equip her fighting forces.
The gap was closed, as table 1 reveals, in a number of ways.
(1) Running down the stock of raw rubber. Stocks had been built
up by heavy imports in 1940 and 1941. The Rubber Reserve
Corporation founded in June 1940 had purchased much of this
rubber. Initially, according to Herbert Feis (1947), he and like
minded state department officials, had pushed for a very
aggressive buying program, but were thwarted by Jesse Jones of
the Reconstruction Finance Corporation who set tight limits on
what the Rubber Reserve could pay. Eventually, when the rubber
companies found themselves desperately bidding against each
other, and outbidding the Rubber Reserve, the decision was
reached to make the Rubber Reserve the sole buyer.
(2) Increasing production of natural rubber in areas
controlled by the Allies. Sri Lanka was the major remaining
12
producer, and its output increased substantially. Attempts were
also made to increase production in Liberia, to buy wild rubber
in Latin America, and even to plant rubber producing crops such
as guayule in the United States. Together, however, these efforts
-- as can be seen in the low levels of imports in 1942 through
1945 -- produced only limited supplies of new rubber.
(3) Building synthetic rubber plants. The synthetic rubber
program proved a success, and was providing substantial supplies
of rubber by the fourth quarter of 1943. The Reconstruction
Finance Corporation financed it.
(4) Cutting back consumption. Conservation of rubber
occurred in a variety of ways. The military changed its
specifications to minimize the use of rubber. Civilian production
was quickly limited by a series of orders from the War Production
Board. Most important, civilian production of automobile tires
was prohibited for the first nine months of 1942. (Wendt 1947,
216-17). It is tempting to view the prohibition of tire
production, and related orders, as important in pushing the
industry into production for the military. But whether it was
more the push from limitation orders or the pull from highly
profitable war contracts would be hard to determine. After all,
official government orders provided a useful excuse for producers
who wanted to break relations with long-term customers.
One thing is certain, profits of the tire companies rose
substantially during the war. Net income of the tire companies
rose from $54 million in 1940 (the best previous year was $51
13
million in 1927) to a wartime record of $312 million in 1943.
(U.S. Department of Commerce, Rubber, 1950, 9). Evidently, there
was ample incentive to convert to war production.
(5) Increasing production and consumption of reclaim. As can
be seen in the last column of Table 1, consumption of reclaim was
close to 40 percent of total consumption in the key years 1942
and 1943.
As it turned out the situation never became desperate, and
the United States finished 1943 and 1944 with adequate stocks of
rubber on hand. Nevertheless, the sense of urgency at the
beginning of the war was understandable. When the war began no
one knew how much rubber we would need each year, how long the
war would last, or when and if the synthetic rubber program would
be successful. The last line of the table, *1943, is drawn on the
assumption that the synthetic rubber program was able to deliver
only 50 percent more rubber in 1943 than 1942, rather than the
increase by a factor of 10 that actually occurred. On this
assumption, the stock of rubber on hand would have been
exhausted.5
The normal flow of scrap rubber to the reclaimers fell
precipitously after Pearl Harbor. Owners of scrap, and scrap
dealers were holding on to scrap on the reasonable speculation
that prices would soon rise. An agreement was quickly reached by
5 There was also the fear of sabotage. On October 11, 1941 a fire
at a Firestone plant in Fall River Massachusetts -- naturally
attributed to sabotage given the temper of the times -- destroyed
what was estimated as 12 percent of the U.S. stockpile of rubber.
14
the reclaimers, by various government agencies, and by the
petroleum industry, to keep the reclaimers supplied by embarking
on a high profile scrap drive. The drive lasted from June 15 to
July 10, 1942. It was kicked off by one of Roosevelt's fireside
chats, and conducted throughout with much fanfare. The purpose of
the drive was, undoubtedly, to bring in the scrap necessary to
keep reclaimers going. It probably also had a propaganda purpose:
by communicating to the public the urgency of the rubber
shortage, the President paved the way for more restrictive
measures such as gasoline rationing. (Goodwin 1994, 357).
As in the other drives the response was eye-catching: old
tires, hot water bottles, rubber bands, and rubber duckies were
sacrificed. Government officials vied to show their enthusiasm.
Harold Ickes, the Petroleum Coordinator, denounced "hoarders" and
in a well-publicized contretemps ordered that the floor mats in
the Interior Department be scrapped. Unfortunately, he was later
forced to admit that they weren't his to donate.
The drive is said to have produced approximately 400,000
long tons of scrap, and although some criticisms were made of the
quality of the scrap procured, the industry took pride in the
voluntary cooperation of its dealers, and of the resulting
donations to charity. (Petroleum Industry War Council, 1943).
Rubber was bought at a penny a pound ($20 per short ton) by
filling stations. The Oil companies were in turn reimbursed at
the rate of $25 per ton by the Rubber Reserve Corporation. At the
15
same time the major reclaimers entered into an agreement with the
Rubber Reserve to process the scrap with all costs reimbursed by
the Rubber Reserve. Any "profits" they made were to be given to
charity.
A penny per pound may sound like a token price. In fact, by
historical standards it was a high
point-of-origin
price for
scrap rubber. Although exact figures aren't available, one
authority put the range of scrap prices between 1915 and 1940 at
$15 to $30 per ton
delivered-at-Akron
, with the typical price
around $20 per short ton. (Ball 1947, 150).
One reason for setting a high point-of-origin price for
scrap may simply have been a recognition that even in wartime
incentives matter. An editorial in
Time Magazine
for June 8, 1942
noted that the Aluminum drive had been a mess partly because the
junk dealers were not involved. And it pointed out that junk
dealers were small businessmen who could not afford to donate
their time to the drive.
Time
argued that the price of scrap
rubber ought to be allowed to rise as high as $50 or $100 dollar
per ton.6
When the drive ended it was thought likely that further
rubber drives would be undertaken, but this did not happen. The
Rubber Reserve maintained its buying price at $25 per short ton
until May 1943 when it was lowered to $15 per short ton. This
somewhat surprising decision suggests that by then scrap rubber
6 Quoted in Wolf (1943, pp. 56-7).
16
was no longer in short supply. On January 1, 1944 the industry
was returned to private hands.7
The interest of the reclaimers and their customers in
promoting a scrap drive was straightforward: more was better. The
interest of the oil companies was indirect. Gasoline was abundant
in most of the country, especially the Southwest, by prewar
standards, and there was little reason on that account to ration.
The exception was part of the Northeast where supplies brought by
sea had been interrupted by German submarine activity. It was
widely believed, however, that gasoline rationing (and low
driving speeds) was crucial for conserving tires. The Baruch
(1942) report on the rubber situation, issued shortly after the
drive, but reflecting the consensus in Washington at the time of
the drive, pushed for nationwide gasoline rationing and a 35 mile
per hour speed limit to conserve tires. Thus, by promoting scrap
rubber collection the oil companies hoped to increase the supply
of rubber for civilian tires and limit the extent of gasoline
rationing.
The most ambiguous position was that of the major scrap
brokers. One reason for their willingness to become instruments
of the government, undoubtedly, was the desire to escape being
labeled war profiteers. The agreement signed between the Rubber
7 No one expected motorists to turn in new tires, even at a penny
a pound. New, unmounted tires in the hands of the public were
treated separately: it was required that they be transferred to
the government and they were paid for through the "Idle Tire
Purchase Program."
17
Reserve Corporation and the scrap brokers emphasized
reimbursement for costs. And a history of the industry published
by one of the major brokers in 1943 described the deal as being
on an "out-and-out no profit basis" (Wolf 1943, 58). The goal of
avoiding the charge of profiteering was only partially met -- the
terms of the agreement with the government came in for criticism
in the press -- but probably provided an incentive for entering
the reimbursement arrangements. There may also have been some
concern that the scrap collected in the drive would turn out to
be low quality (the floor mats from the Interior Department) and
costly to sort.
The decision to control prices of scrap rubber, and to rely
on voluntary cooperation backed up by heavy subsidies, is also
consistent with the broader theory of inflation, discussed in the
preceding section, that price increases in bottleneck sectors
tend to multiply and get out of control.
The rubber drive and subsequent purchases by the government
brought in a great deal of scrap, and production and consumption
of reclaim was high during the war. But as with iron and steel,
the wartime experience needs to be put in perspective. Figure 3
plots consumption of reclaimed rubber from 1919 to 1954.
Consumption was high during the war, as might be expected in a
boom, but the peak is less than would be expected on the basis of
stories about the rubber drive. Consumption was above 1928, the
peak year in the 1920s, by 13 percent in 1941, 14 percent in
1942, and 31 percent in 1943. A comparison with the early postwar
18
years also suggests that the wartime performance was closer to
the peacetime norm than might be inferred from breathless stories
about wartime scrap drives.8 The 1943 peak was less than 2
percent above the first postwar peak in 1947; and it was 4
percent below the level reached in 1950 and 17 percent below the
level reached in 1951 the first postwar peak, although the latter
years were also war years.9 The wartime collections, as shown in
figure 3, barely poke their way above the peak-to-peak trend.
Consumption of reclaim, which is the only series available
for the interwar years, differs from production because of
imports, exports, and additions to and subtractions from stocks.
The practice in the reclaim industry, however, was to maintain
relatively low inventories of unprocessed and processed scrap.10
Imports and exports were also relatively small, so relying mainly
on consumption figures should not lead us far astray. Production
figures are available from 1940 on. In 1946, the first postwar
production peak, production of reclaim was 2.8 percent below
8 The postwar industry was, of course, somewhat different from
the prewar industry. Much of the material available for reclaim
now consisted of synthetic rubber, and the scrap heap was
relatively depleted because wartime additions were at a low
level.
9 The Korean War began suddenly in June 1950 when North Korea
invaded South Korea. Concern about the rubber situation was, of
course, much less because synthetic rubber was now a reality, and
because natural rubber producing areas were not immediately in
danger.
10 During 1942-1945 stocks of reclaim on hand at the end of the
year averaged under 2 months consumption. Imports and exports
were negligible.
19
production in 1943, the wartime peak. The Rubber Reserve Company,
which purchased scrap and sold it to reclaimers during the war,
reported the results of its operations in 1945. (U.S. Rubber
Reserve Company, 1945, 57). All told it purchased 990,944 long
tons of scrap and sold 828,288 to reclaimers. Thus, only about 12
percent failed to go through the reclaiming mills and much of
this was low quality.
As figure 3 suggests, the best historical precedent for the
rubber scrap drive in World War II is the drive in the mid-1920s,
traditionally associated with the Stevenson Rubber Restriction
Plan. The Plan, which became British law on November 1, 1922, was
intended to boost raw rubber prices by restricting the output of
British plantations in Malaya and Ceylon. It followed a period of
low rubber prices which growers had tried to counteract
unsuccessfully with voluntary plans. Initially, to judge by raw
rubber prices, the Plan had mixed results. The Plan imposed a
prohibitive tax when planters exported more than 60 percent of
the amount sold in the year ending October 31, 1920. The
allowable percent could be raised or lowered by 5 percent based
on a scale tied to the London price of crude rubber. In the
first years of operation prices sagged and the amount that could
be exported before prohibitive taxation kicked in was lowered.
But in 1925 heavy demand for rubber, produced by the introduction
of the rubber-intensive balloon tire, ran into a supply
restricted (at least to some degree) by the Stevenson Plan and
20
the result was the rapid increase of raw rubber prices.11
Patriotism was invoked in the United States during the
period of high rubber prices in the 1920s, so we don't have a
patriotism- free comparison. Harvey Firestone reacted violently
to the Stevenson Plan, and his company's advertisements
proclaimed that "America Should Produce its Own Rubber."
Firestone lobbied his fellow Ohioan, Warren Harding, for
government support for American rubber plantations in the Western
Hemisphere. Enthusiasm for action waned, however, when raw rubber
prices retreated in 1922 and 1923. But the rapid increase of
prices in 1925 led to new calls for action. In December 1925
Secretary of Commerce Hoover appealed to the public and to the
manufacturers for cooperation in beating back high rubber prices
through conservation and the creation of independent American
supplies. Inevitably, a Congressional investigation was organized
of "The Means and Methods of Control of Production and Export of
Crude Rubber." When rubber prices broke in February 1926, Hoover
took credit.12
It seems reasonable to suppose that the patriotic appeals of
Hoover and other leaders helped motivate participants in the
scrap drive. Nevertheless, it seems unlikely that patriotism in
11 The Stevenson Plan is described in McFadyean (1944, 24-35).
12 Wolf and Wolf (1936, 229-232) attribute the ultimate failure
of the Stevenson Plan, which was terminated on November 1, 1928,
to the effectiveness of the scrap drive, smuggling, and most
important, the rapid growth of output in the Netherlands East
Indies.
21
the 1920s could have been felt on the same scale as in the War
because there was no threat to the nation's safety. Indeed, many
people viewed Hoover's actions simply as grandstanding designed
to improve his prospects for the White House.
The period of high consumption of reclaim associated with
the Stevenson Restriction was shorter than the comparable period
in World War II. It is conceivable, therefore, that World War II
consumption levels were higher in the sense that they used a
larger fraction of the available stock of discarded rubber --
the "scrap heap." Unfortunately, there are no reliable estimates
of the size of the scrap heap. Estimates made at the beginning of
the war differed widely. Figure 4 shows consumption of reclaim in
each year as a percentage of my estimate of the scrap heap. The
assumptions were that (1) rubber products were normally scrapped
after three years, (2) that 75 percent of the original rubber was
available for reclaim in the first year after scrapping, and (3)
that any rubber not reclaimed deteriorated another 25 percent
each year that it remained in the scrap heap. Figure 4 also shows
an alternative, which assumes that normal scrapping did not occur
from 1942 to 1944. On these assumptions the consumption of scrap
during the war was on the same order as occurred during the
period of high consumption of reclaim associated with the
Stevenson Restriction.
Admittedly, any attempt to infer the size of the "scrap
heap" is speculative. I tried a variety of measures, based on
different assumptions about how the scrap heap was accumulated,
22
and the results were similar. The simple fact is that production
from raw rubber in the late 1930s was much higher and the use of
reclaim was much lower than in the early 1920s. So deflating by
any measure of the scrap heap that depends on recent production
from imported rubber will make consumption during the war even
more similar to consumption during the Stevenson restriction than
on the assumptions underlying figure 4.
A further indication that wartime consumption of reclaim was
not out of line with what might have been expected in peacetime,
is the capacity of the reclaimers. The Baruch report placed the
capacity of the reclaimers in 1942, assuming intense utilization,
at 350 thousand long tons. The Report, in line with its general
policy of pushing every source to the maximum, called for a 20
percent increase in the capacity, and production of 400 thousand
long tons in 1943. These projections were not met. But the
important point for our purposes is that the amount of reclaim
actually produced was within the existing capacity of the prewar
industry. The wartime use of scrap, to put it differently, seems
to have been consistent with industry expectations in the absence
of the war.
The peak-to-peak trend line shown in figure 3, is perhaps
the simplest way to show what would have happened in a peacetime
boom. To get a (possibly) more realistic alternative I regressed
consumption of reclaim on industrial production and the
consumption of raw rubber (all measured as natural logarithms)
and then forecasted wartime consumption of scrap based on the
23
wartime values of these variables. Industrial production was
included as a proxy for demand. It is not ideal because the
structure of demand changed dramatically during the war. But it
appears to be the best alternative because it is likely to
capture some of the tilt toward the industrial sector that
occurred during the war. I didn't include prices; because
measured prices were distorted by controls.
Figure 5 plots the price of reclaim relative to the price of
natural rubber and the consumption of reclaim relative to
consumption of natural rubber, both set equal to 100 in 1929. The
prewar years show a normal relationship. Increases in the price
of reclaim relative to the price of natural rubber produce
decreases in the consumption of reclaim relative to consumption
of natural rubber. Note particularly, the Stevenson restriction
period, when the relative price of reclaim fell and its use
intensified. During the war, however, reported prices of natural
rubber (the Rubber Reserve's selling price) remain low relative
to the price of reclaim, yet the use of reclaim soars. To some
extent this relative price relationship is real, a reflection of
the controls placed on rubber during the war, although the
reported price of natural rubber may not reflect prices of raw
rubber if resold.
The forecast assumes that price responses to real
determinants of markets were "normal" during the war years. This
is the assumption we want to make because we want to know what
would have happened if there had been a similar shortage of raw
24
rubber in a world that had to rely on price incentives rather
than patriotism to bring in the scrap.
The regression, estimated over the years 1919-1941, was
(1) RECLAIM = 2.91 + 1.26IP + 0.40RUBBER
(1.25) (3.51) (1.68)
R2 (adj.) .74
DW .40
where RECLAIM = the amount of reclaim consumed
IP = Industrial Production
RUBBER = the amount of natural rubber consumed
All variables were measured in natural logarithms. This
regression has the honor of being the first that I ran. I tried a
number of other specifications, including first differences.
While it was fairly easy to find specifications that fit the
prewar data better, and which produced more satisfactory Durbin-
Watson statistics, almost all of these regressions forecasted
improbably high or improbably low consumption of reclaim during
the war.
In any event, figure 6 shows the amount predicted by
equation (1), along with the amount predicted by the peak-to-peak
trend, and the actual amounts consumed. The similarity between
the wartime levels and the peak-to-peak trend emphasizes how
moderate the wartime peak was. The predicted values from
equation (1) exceed actual consumption from 1942 through 1944,
25
falling below only in 1945. We should not make too much of this
in light of the high variance of predicted values from plausible
specifications, but it does suggest that wartime consumption was
well within the bounds of what might have been expected on the
basis of prewar experience.
VI. What Can we Learn from the Salvage Drives?
The point of these stories is not that the salvage drives
had no effect on, or were a hindrance to the war effort. For one
thing, the psychological and political effects of the drives may
have been important, even though these effects are difficult to
specify and measure. The drives gave Americans on the home front
a concrete way to display their support for the war, and may have
solidified support for the war.
The economic effects of the drives, however, have been
exaggerated. To be sure, the iron and steel drive and rubber
drive probably made additional supplies available. But the
additional amounts were of a much smaller order of magnitude than
popular stories about wartime drives would lead one to believe.
Historians often describe the scrap drives as if the
mobilization of large amounts of scrap was unique to the war.
This was far from being the case. Scrap collection was an
ancient, honorable, and efficient business that functioned in
peace as well as war. The amount of iron and steel salvaged in
1942 was only 9 percent above the amount salvaged in 1937 the
26
prewar peak. The wartime rubber drive was an enlarged version of
the drive that occurred in the late 1920s as a result of a sharp
run-up in natural rubber prices. By 1950, moreover, more iron and
steel scrap and more rubber scrap were being processed than
during the peak war years. The scrap drives did not push scrap
collections to spectacular heights.
The patriotism that surrounded the drives, moreover, did not
erase the impact of conventional economic incentives. The fat
drive was unnecessary, the product of special interests seeking a
way around price controls and rationing. The lack of adequate
price incentives confused the iron and steel scrap drive and made
it less effective than it otherwise would have been. The rubber
drive was more effective because this lesson was learned, and a
high point-of-origin price for scrap was established.
Rather than demonstrating the importance of non-pecuniary
motives and non-market means of production, the salvage drives
demonstrate the limited ability of patriotism and community
spirit to overcome technical constraints, or the tendency of
people to respond to economic incentives.
27
28
29
30
31
32
33
Table 1
The U.S. Rubber Budget in World War II
Imports
Natural
Rubber
Cons.
Natural
Rubber
End of
Year
Stocks
Natural
Rubbera
Consumption
Reclaim Cons.
Synthetic
Rubber
1935 467 492 312 (7.6)b 118 (19%)c 0.2
1936 487 575 223 (4.7) 142 (20) 0.3
1937 598 544 262 (5.8) 162 (23) 0.5
1938 409 438 231 (6.3) 121 (22) 1.0
1939 497 592 125 (2.5) 170 (22) 1.9
1940 815 649 289 (5.3) 190 (23) 2.9
1941 1024 775 533 (8.3) 251 (24) 6.3
1942 277 377 422 (13.4) 255 (39) 17.6
1943 52 318 139 (5.3) 291 (37) 170.9
1944 107 144 96 (8.0) 251 (26) 566.6
1945 139 105 45 (5.1) 241 (23) 693.5
*1943 52 462 -6 291 26.4
Source: Feis (1947, 311).
aThe change in end of year stocks can differ from imports less
consumption because of reexports and for other reasons.
bStock in months of consumption at the current rate.
cConsumption of reclaim as a percent of the total.
34
References
Ball, John M. Reclaimed Rubber: The Story of an American Raw
Material. New York: Rubber Reclaimers Association, Inc., 1947.
Barringer, Edwin C. The Story of Scrap. Washington D.C.:
Institute of Scrap Iron & Steel Inc., revised edition, 1954.
Baruch, Bernard M. U.S. Special Committee to Study the Rubber
Situation, Report. Washington D.C.: GPO, 1942.
Benes, Robert J. "Iron and Steel Scrap." In Studies in Industrial
Price Control. Historical Reports on War Administration: Office
of Price Administration, General Publication No. 6. Washington
D.C: G.P.O., 1947.
Cohen, Stan. V for Victory: America's Home Front During World War
II. Missoula Montana: Pictorial Histories Publishing Co., Inc.,
1991.
Fantin, Renee. "Fats and Oils and Dairy Products Rationing." In
Studies in Food Rationing. General Publication No. 13. Historical
Reports on War Administration: Office of Price Administration.
Washington, D.C: U.S. Government Printing Office, 1947.
Feis, Herbert. Seen from E.A.: Three International Episodes. New
York: Alfred A. Knopf, 1947.
Goodwin, Doris Kearns. No Ordinary Time. Franklin & Eleanor
Roosevelt: The Home Front in World War II. New York: Simon &
Shuster, 1994.
Hoopes, Roy. Americans Remember the Home Front: An Oral
Narrative. New York: Hawthorn Books, 1977.
Knorr, K.E. World Rubber and its Regulation. Stanford CA:
Stanford University Press, 1945.
Lingeman, Richard R. Dont You Know There Is a War On? The
American Home Front, 1941-1945. New York: G.P. Putnam's Sons,
1970.
McFadyean, Sir Andrew, ed. The History of Rubber Regulation,
1934-1943. London: George Allen & Unwin, Ltd., for the
International Rubber Regulation Committee, 1944.
O'Neill, William L. A Democracy at War: America's Fight at Home
and Abroad in World War II. New York: The Free Press, 1993.
35
Petroleum Industry War Council. "Penny a Pound:" The President's
Rubber Drive. Washington D.C.: Petroleum Industry War Council,
1943.
Russell, Judith. "The Fat Salvage Campaign." In Studies in Food
Rationing. General Publication No. 13. Historical Reports on War
Administration: Office of Price Administration. Washington, D.C:
U.S. Government Printing Office, 1947.
Schumpeter, Joseph A. History of Economic Analysis. New York:
Oxford University Press, 1954.
U.S. Department of Commerce, U.S. National Production Authority.
Materials Survey: Rubber. Washington D.C.: GPO, 1950.
U.S. Department of Commerce. Rubber, Sixth Annual Report.
Washington D.C.: GPO, 1954.
U.S. Rubber Reserve Company. Report on the Rubber Program, 1940-
1945. Washington D.C.: GPO, 1945.
Walton, Frank L. The Thread of Victory: The Conversion and
Conservation of Textiles, Clothing and Leather for the World's
Biggest War Program. New York: Fairchild Publishing Co., 1945.
Wendt, Paul. "The Control of Rubber in World War II." The
Southern Economic Journal 13 (January 1947): 203-27.
Wolf, Howard. The Story of Scrap Rubber. Akron, Ohio: A.
Schulman, Inc., 1943.
Wolf, Howard and Ralph Wolf. Rubber: A Story of Glory and Greed.
New York: Covici, Friede, 1936.
36
Table A1 Iron and Steel Scrap
Consumption (Long Tons) Price
No. 1
Heavy Melting
Steel
In House Purchased
1935 13,346,752 13,068,578 11.85
1936 18,901,389 17,456,744 14.83
1937 19,871,033 18,135,239 18.03
1938 11,321,341 10,023,593 13.54
1939 17,519,550 14,914,857 16.39
1940 22,364,030 17,394,597 18.76
1941 30,272,035 22,599,622 19.50
1942 29,579,797 24,228,374 19.17
1943 31,283,116 23,762,379 19.17
1944 31,631,437 23,145,723 18.55
1945 27,643,486 22,527,126 19.15
1946 23,334,073 20,848,167 20.28
1947 28,195,000 26,148,000 36.65
1948 28,946,000 29,057,000 41.66
1949 26,041,000 22,475,000 27.56
1950 32,095,000 29,402,000 34.75
1951 34,693,521 33,813,709 43.15
1952 31,104,280 30,523,508 41.79
1953 37,411,159 31,614,817 39.52
Source: Barringer (1954),133, 135.
37
Table A2 Reclaimed Rubber
Consumption of Rubber
in Long Tons Price of Rubber
Cents Per Pound
Reclaimed Natural Synthetic Natural Reclaimed
1919 73500 215000 0 48.7 16.2
1920 75300 206000 0 36.3 15.5
1921 41400 177800 0 16.4 11.3
1922 54500 301500 0 17.5 9.1
1923 69500 319400 0 29.5 9.6
1924 76100 328800 0 26.2 9.0
1925 137100 388500 0 72.5 10.1
1926 164500 366200 0 48.5 11.7
1927 189500 373000 0 37.7 9.4
1928 223000 437000 0 22.5 8.3
1929 212700 467400 0 20.6 8.0
1930 153500 376000 0 12.0 6.8
1931 123000 355200 0 6.2 5.5
1932 77500 336700 0 3.5 4.1
1933 85000 412400 0 6.0 4.5
1934 100900 462500 0 13.9 5.2
1935 117500 491500 200 13.4 5.3
1936 141500 575000 300 16.4 5.3
1937 162000 543600 500 19.4 6.1
1938 120800 438000 1000 14.6 6.1
1939 170000 592000 1900 15.6 6.0
38
1940 190200 648500 2900 20.1 6.0
1941 251231 775000 6300 22.4 6.3
1942 254820 376800 17600 22.5 6.5
1943 291082 317600 170900 22.5 6.5
1944 251083 144100 566600 22.5 6.6
1945 241036 105400 693500 22.5 7.0
1946 275400 277600 761700 22.5 7.3
1947 288395 562661 559666 20.8 8.0
1948 261113 627332 430618 22.0 NAa
1949 222679 574522 397139 17.6 NA
1950 303733 720268 512579 41.2 NA
1951 346121 454015 748650 57.7 NA
1952 280002 453846 787454 33.4 NA
1953 285050 553473 771806 24.2 NA
1954 249049 596285 620223 23.6 NA
Sources: Consumption 1919-1946 (Ball 1947), 204-05; 1947-1954,
U.S. Department of Commerce, Rubber, Sixth Annual Report
(Washington D.C.: GPO, 1954), 21, table 13. Prices 1919-1946
(Ball 1947), 206-07; 1947-54 (natural only), U.S. Department of
Commerce, Rubber, Seventh Annual Report (Washington D.C.: GPO,
1955), 11, table 4.
aAccording to the U.S. National Production Authority, Materials
Survey: Rubber (Washington D.C.: GPO, 1950), X-4, the price of
first grade tire reclaim rose from 8 cents for 1947, "to 9 cents
in June 1950, and to 10 1/2 cents in September 1950, where it
remained during the first half of 1951."
