Virgil D. Jordan – The Capital Needs of Industry for National Defense (1940)

Condensed from an address by Virgil D. Jordan, president, National Industrial Conference Board, before the annual convention of the Investment Bankers Association in Hollywood, Florida, December 10, 1940.

Before we can understand any of the needs of industry for national defense, we must first try to comprehend what this thing we call our “defense program” really means. We have not yet been willing to look the phrase squarely in the face. We vaguely recognize that it has something to do with the world war raging in Europe, Africa, and Asia, the depressing news of which we read in our morning paper, but I am afraid that most of us still have only the dimmest idea about the relation of our defense program to this planetary struggle.

When it began in September, 1939, we could not be blamed for feeling that we did not know enough of the facts about this war to be sure of the part we should play in it. Since then we have learned more, but not much, and even today few people, if any, know the truth about conditions in any country involved in it, or even in our own; and if anyone does, no one is telling it. In peace time it is the accepted custom and normal manners of modern government to conceal all important facts from the public, or to lie about them, in war it is a political vice which becomes a public necessity. People in every country, including our own, have more or less reconciled themselves to being pushed around by their public employees and treated as though they were helpless wards or incompetent inmates of some vast institution for the indigent and feeble-minded. It is much in this spirit and atmosphere that the chatter and prattle about our national defense program proceeds in this country today.

Whatever the facts about this war may have been or are now, it must be unmistakably clear to any intelligent person that we are engaged in it. Our government has committed the American community to participation in this war as the economic ally of England, and as her spiritual, if not her political, partner in her struggle with the enemies of the British Empire everywhere in the world, to help prevent, if possible, their destruction of the Empire, and if this should not be possible, to take her place as the heir and residuary legatee or receiver for whatever economic and political assets of the Empire survive her defeat. To meet this commitment our government has been, or will be, compelled to assume control of the lives, property, resources, and productive organization of the American community, and to do so more completely than it anticipated would be necessary in carrying out the program of socialization upon which it was engaged during the six years before the war began.

In broad and blunt terms, that is what the national defense program really means, and it is in the light of this fundamental fact that all problems of economic policy, as regards business, investment, consumption, labor, and government, must be considered henceforth. Whether this colossal commitment, of which the American community was, and still is, largely unconscious, was a wise one for the future of the American people, is a debatable but now utterly idle question, and I for one am not willing to debate it any more.

We should realize, however, that even the job of winning the war, with England or alone, is only part of the task to which America has committed herself for the future. Whatever the outcome of the war, America has embarked upon a career of imperialism, both in world affairs and in every other aspect of her life, with all the opportunities, responsibilities, and perils which that implies. This war inevitably involves a vast revolution in the balance of political and economic power, not only internationally but internally. Even though, by our aid, England should emerge from this struggle without defeat, she will be so impoverished economically and crippled in prestige that it is improbable she will be able to resume or maintain the dominant position in world affairs which she has occupied so long. At best, England will become a junior partner in a new Anglo-Saxon imperialism, in which the economic resources and the military and naval strength of the United States will be the center of gravity. Southward in our hemisphere and westward in the Pacific the path of empire takes its way, and in modern terms of economic power as well as political prestige, the sceptre passes to the United States.

What this implies in terms of economic expansion for an indefinite period in the future no one at this time can even imagine. From the pages of British experience, however, we know some of the things that this white man’s burden may mean when we assume it. We know that it implies a vast responsibility of assembling, applying, and conserving the financial resources. Upon which it rests We know, too, from some of the darker pages of British experience in the past century, that it implies an enormous task of expanding and maintaining a vast organization of man-power, machines, and equipment, not merely for national defense, but for effective and continuous exercise of international authority in the maintenance of peace and order. We should realize, too, that before this part of our new imperial responsibilities can be performed, they must rest upon the solid and broad base of internal unity and domestic prosperity, which will imply intelligent and courageous reconstruction of our own economic and political life after the immediate war effort is over.

We may be afraid of the unfamiliar and forbidding word imperialism in connection with the commitment we have made. We may prefer, in the current American fashion, to disguise it in a vague phrase like “hemisphere defense.” But, consciously or unaware, America has been destined to that career by its temperament, capacities, and resources, and by the drift of world events, not merely in recent years but since the beginning of the century, and certainly since the last war. The confused and often infantile financial adventures of the 20’s, of the depression, and of the New Deal period, as well as the disintegration of Europe in the past decade and the desperate plight of England, have driven us along that road, and provided us not only with the occasion but with the economic tools, the social attitudes, and now the political manners and customs of modem imperialism. In fact, in the event of a German victory there is no escape from that responsibility except by a relapse to a position of inferiority, which is inconceivable. We have no alternative, in truth, than to move along the road we have been traveling in the past quarter century, in the direction which we took with the conquest of Cuba and the Philippines and our participation in the last World War.

All this is what lies beneath the phrase national defense—some of it deeply hidden, some of it very near the surface and soon to emerge to challenge us. Both the immediate task of defending Britain and perhaps saving her from defeat, and the more distant responsibility and opportunities of imperial inheritance, will require the immense effort and vast sacrifice which any great destiny demands if it is to be fulfilled. We must be prepared, as we are not yet prepared, for such effort and sacrifices, but if and when we make them willingly, we must be equally determined that they shall not be made in vain. We shall regard the effort and the sacrifice necessary both to win the war and to fulfill the responsibilities of empire as an immense investment in the future of America, and perhaps in the future of civilization.

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