Tomorrow is the anniversary of one of the greatest—and most terrible—days in human history: The D-Day Invasion of France. When we think of D-Day, we think of the landings at beaches called Omaha and Utah, Juno, Sword and Gold; brave U.S. Army Rangers scaling cliffs to take German Gun emplacements; fierce naval bombardment and air attacks. We think of the men on the battlefield who took those first, hard fought steps to liberate Europe from Hitler and his Nazi cohorts and it is right that we should think of them first, but we should also take a moment to reflect on the contributions made at home, especially by small businesses across the nation, that helped our soldiers and sailors in Europe and in the Pacific prevail.
The Reconstruction Finance Corporation and the Smaller War Plants Corporation
The aid small businesses received during the war years actually stems from programs that were developed in the early 1930s as a response to the Great Depression; agencies that, over time, coalesced into what we know as the Small Business Administration. The Reconstruction Finance Corporation (RFC) was created by President Herbert Hoover in 1932—and later adopted by his successor, Franklin Delano Roosevelt—to help deal with the financial crisis of the Great Depression. The RFC was a federal lending program for all businesses—large and small—that had been hurt by the Depression.
With the start of World War II, specific concern for small businesses intensified. The way things were, small business couldn’t compete against large industries that could more easily increase their production—or retool entirely—to meet their wartime defense contracts. A way to alleviate this problem was found in 1942 with the creation of the Smaller War Plants Corporation (SWPC). This new entity, like its precursor, the RFC, provided loans to small businesses and entrepreneurs. However, it went further than that. The SWPC also encouraged large financial institutions to extend credit to small business and advocated small business interests to both federal procurement agencies and big businesses.
This set the stage for a resurgence of small business activity in the war effort that was a marvel of both efficiency and productivity.
Small Business Success during World War II: The Army-Navy E-Award
It was a document written in 1942 with the unassuming name of War Department Circular No. 228 that announced the creation of the new Army-Navy Production Award, which would bring the existing Navy E-Award, the Army A-Award and the Army-Navy Star Award together into a single joint award. While it was officially called the Army-Navy Production Award, it was referred to more often as the Army-Navy E-Award.
All plants, large or small, privately owned or government-run, prime contractors or subcontractors, that wholly or partially engaged in war production and construction work, were eligible for the Army-Navy Production Award. The criteria, which were strictly applied by the judges of the Army Board of Production Awards, were as follow:
- Quality and quantity of production in the light of available facilities (given the greatest weight in selecting recipients).
- Overcoming production obstacles.
- Avoiding production stoppages.
- Maintaining fair labor standards.
- Training additional labor forces.
- Effective management.
- A good record on accidents, health sanitation, and plant protection.
- Properly utilizing subcontractors.
There were nearly 87,000 plants working on war-related projects or construction during World War II. Of these, only 4,283, roughly 5% of the total met the criteria for this award. Of that number, fully 50% were small businesses that employed fewer than 500 people. The excellence and productivity of these businesses that ranged from one-man shops to small factories was undeniable and for many it was ongoing.
Plants maintaining an outstanding record of performance for six months after receiving the original Army-Navy E-Award received a Star Award, indicated by a white star on their “E” flag. Additional stars could be won by continued outstanding performance for succeeding six-month periods until the flag carried four stars, after which the interval was increased to one year.
Of the 4,283 plants that were granted the Award, eight won six Star Awards when the program ended. Four of these had retained their original Navy “E” Awards and were as follows: Cameron Iron Works, Houston, Texas; General Motors Corporation, Fisher Body Division, Die & Machine Unit, DetroitMichigan; Midvale Company, Nicetown, (Philadelphia), Pennsylvania; and Northern Ordnance, Inc., Minneapolis, Minnesota. The other four, which had converted from the Navy “E” Award to the Army-Navy “E” Award, were as follows: Arma Corporation, Brooklyn, New York; Ford Instrument Company, Inc., Buildings 1, 2, 3, and 4, Long Island City, New York; Keuffel & Esser Company, Hoboken, New Jersey; and Miehle Printing Press and Manufacturing Company, Chicago, Illinois.
Of these six-star plants, Cameron Iron Works, which made army ordnance, particularly depth-charge projectors and arbors for the navy in World War II, along with gun barrels, gun mounts, and rockets; Arma Corporation, which built fire control computers for the Navy; and the Keuffel & Esser Company, a leading manufacturer of drafting equipment, surveying instruments, slide rules and related products were certainly small concerns.
Of the remaining Awards, 763 had been granted one Star Award, 723 had been granted two Star Awards, 776 had been granted three Star Awards, 820 had been granted four Star Awards, and 206 had been granted five Star Awards. That is a total of 3,296 companies that were able to maintain the high standards of the award for at least 6 months after receiving it, a remarkable achievement, especially during the unstable wartime economic conditions that existed then.
So, What did They Win?
Primarily, these plants won recognition as being the “best of the best,” back when a phrase like that actually meant something. After all, they don’t call that “the greatest generation” for nothing. These happy few could use the award to market themselves and instill pride and boost morale in their people during the war and as long afterwards as they wished. According to Circular No. 228, the companies received:
A pennant for the plant and emblems for all employees in the plant at the time the award is made. These will be paid for by the Department making the award.
The pennant was swallow-tailed and had a white border and a white capital letter E within a yellow wreath of oak and laurel leaves. These were over a vertically divided blue and red background with the word ARMY on the red part and NAVY on the blue. The employee emblems had a capital letter E within a wreath of all silver oak and laurel leaves, and horizontal swallowtail wings divided in five—red, white, blue, white, red.
The Bottom Line
These companies faced a wartime economy and they did it with strength and determination. As Secretary of the Navy Frank Knox wrote to Clark S. Judd, President of the American Brass Company, April 7, 1942, “As the Secretary of the Navy, and as a fellow American, I congratulate you upon the achievement of this honor. And in so doing, let me remind you that your company's contribution, together with that of other of our patriotic countrymen, is only the beginning! This production, increased manyfold, must and will become the tide of victory!”
There was a goal—victory over the Axis powers—and businesses large and small were united in reaching that goal. The first steps toward success, pushed along by Secretary Knox’s “Tide of Victory” were taken on the beaches of Normandy 64 years ago tomorrow. Tomorrow, as you think of those brave men and the tremendous economic engine that carried them to success, consider what you might have done as a business owner to help, and what you can do today.
Today, the conflict isn’t with other world powers, but with big box retailers and it is a matter of economic survival for small business all over America. You are out there in the trenches every day and America’s Best Companies is standing with you, just as the SWPC stood with small business during the war, ready and able to help you reach your goals while working hard every day to improve the conditions under which you operate. If you are a member, you already know about the benefits of membership. If not, check us out. You might be surprised.