product they knew would be in tremendous demand — rifles . Three months later , with President Wilson ’ s approval , J . P . Morgan became the commercial agents in the United States for “ His Majesty ’ s Government ,” i . e . the sole purchasing agent for Great Britain . The following month , France and Russia signed similar agreements , enabling that bank to also provide their governments a streamlined structure for processing loans for purchasing equipment .
The Morgan partners considered running this purchasing operation either through established purchasing agents or through the offices of a large industrial corporation . They decided , however , to establish an in-house export department , and to hire the well-known businessman Edward Stettinius to run the operation . He organized the department ’ s activities along functional lines and hired experienced executives to manage sections involving heavy artillery , propellants , chemicals , food and livestock , among others .
From January 1915 to April 1917 ( when the United States entered the war ), the Morgan bank financed approximately $ 3 billion worth of purchases for the Allies , working with almost 1,000 prime contractors and thousands of subcontractors . More than 42 % of that business was done with 10 firms . The export department ’ s staff of 175 people placed orders accounting for 21 % of all US exports and 84 % of all American sales of munitions and war materials .
The manufacturers who received most of those orders were usually the leading factors in their industries . Many prospered like never before , helping the United States economy recover from the recession of mid-1914 . But trying to fill unusually large orders also caused problems . The managements of the aforementioned Remington and Winchester companies did not appear to understand the nature of war production orders , especially as they involved special products not normally sought by pre-war commercial customers .
Both companies began soliciting contracts from the British government as early as September 1915 . But neither firm made any provisions for altering their civilian workload while trying to satisfy their military contracts . Thus , in order to handle the flow of new business , both were forced to embark on expensive facilities expansion programs . In doing so , both encountered meaningful manufacturing difficulties that caused them to
miss various delivery schedules in 1915 and 1916 . The subsequent customer cancellations almost forced both firms into bankruptcy . Only the United States ’ entry into the war saved them , since they could sell the unwanted production quantities to the US Army .
On the surface it would appear that the DuPont Company faced similar difficulties . Before the war , the company depended largely on the sale of black powder and dynamite . Demand for specialty military products , such as smokeless powder , TNT and picric acid was quite low ; and the company ’ s production capabilities for those materials were very limited . However , as a supplier of gunpowder in the Spanish-American War , DuPont had more experience than most in dealing with a surge in orders for special military products . Its executives knew that such orders would disappear as quickly as they had emerged .
Using that experience , President Pierre DuPont was in a good position to negotiate very favorable terms on the October 1914 order from France for eight million pounds of cannon powder . The contracted price was to be more than twice the price the US government had been paying . Moreover , France was to pay 50 % of the value of the contract up front , 30 % more when the powder was placed in the dry house and the remainder when the powder was ready for shipment . Thus , the customer , not the company , provided much of the capital financing for the new facilities that would be required to produce the material specified in the contract .
DuPont itself risked only the working capital it would need to meet the tight production schedule that called for large deliveries of powder during the subsequent 12 months . Throughout 1915 and 1916 , DuPont signed contracts with similar terms with other Allied governments .
Women drilling engine parts in a Detroit aircraft factory , 1917 .
Preparing for the Country ’ s Active Participation
During the 28 months that J . P . Morgan was facilitating the purchase of war materials by the Allied armies , the citizens and government officials of the United States were engaging in a contentious debate about the advisability of participating in the worsening European conflict . Secretary of State William Jennings Bryan resigned in June 1915 to protest President Wilson ’ s marginally more aggressive posture regarding preparedness . Secretary of War Lindley M . Garrison resigned in April 1916 to protest the President ’ s
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