Defense Plant Corporation (DPC)


A federal agency and subsidiary of the U.S. government’s Reconstruction Finance Corporation (RFC) that led to acquisition by the federal government of a dominant position in several large industries.

On August 22,1940, Congress chartered the Defense Plant Corporation (DPC) in anticipation of war hostilities and assigned it the task of expanding production capabilities for military equipment. Its charter permitted both the building and equipping of new facilities and the expansion of existing structures.

Previously, in 1932, Congress had established the RFC as an independent government agency whose original purpose was to facilitate economic activity by lending during the Great Depression. The RFC would make and collect loans and buy and sell securities. At first it lent money only to financial, industrial, and agricultural institutions, but the scope of its operations widened greatly as a result of revised legislative amendments. These amendments allowed for the making of loans to foreign governments, providing protection against war and disaster damages, and financing the construction and operation of war plants. Approximately two-thirds or $20 billion of RFC disbursements went toward U.S. national defense, especially during World War II.

The RFC financed much of American industrial expansion during World War II. Various government departments such as the War and Navy Departments, the Office of Production Management, the War Production Board, and the Maritime Commission would request what they needed from the RFC, and in turn the DPC would ensure that the plants (mostly new factories and mills) were constructed, equipped, and operated. Jesse H. Jones, with Emil Schram and Sam Husbands, managed the DPC. From its inception in 1940 through 1945, the DPC disbursed over $9 billion on 2,300 projects in 46 states and in foreign countries. In general, the government owned the plants and then leased them to private companies to operate. In spending these billions of dollars, the government acquired a dominant position in several industries including aircraft manufacture, nonferrous metals, machine tools, synthetic rubber, and shipping. The materials and supplies produced during the war ranged from bearings to giant guns, tanks, ships, and airplanes. About half of the spending of funds went directly or indirectly for aviation. One of the DPC’s largest projects involved a $176 million Dodge-Chicago plant that manufactured aircraft engines for the B-29 and B-32 airplanes. The plant’s 19 one-story buildings stretched over 1,545 acres of floor space. It was so large that it had its own steel forge and aluminum foundry and could take in raw materials at one end and turn out finished engines at the other. Congress dissolved the DPC on July 1,1945.

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