Automobile Manufacturer Returns During World War II: From Cars to Armaments and Back
Fred R. Kaen

Abstract
On January 3, 1942, Leon Henderson, head of the World War II Supplies Priority and Allocations Board, announced that all production of passenger cars and trucks for civilian purposes was to cease on January 15.The conversion was controversial. Many of the progressives in Roosevelt’s circle and administration were skeptical of plans to have the private sector and “big business” in charge of war production and many in Congress viewed private business control of war production as a way for earning profits at the expense of labor and society at large. I examine these allegations using the stock prices of automotive companies during the World War II years. I find that investors in automobile companies did earn excess returns during the War years but not before and after the War. Furthermore, the major beneficiaries on the conversion were the small single line firms, not the giants.

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