The U.S. Synthetic Rubber Program: An Industrial Policy Triumph during World War II

Of all critical and strategic materials, rubber is the one which presents the greatest threat to the safety of our nation and success of the Allied cause . . . we find the existing situation so dangerous that unless correc­tive issues are taken immediately this country will face both a military and a civilian collapse.

—Special Committee to Study the Rubber Situation, 1942

How can the United States quickly build secure, domestic supply chains for critical resources? It’s a question on minds in Washington, especially in the shadow of China’s tightening restrictions on the export of critical minerals, battery technology, and drone inputs to the United States. In early December 2024, Beijing announced a ban on the sale of gallium, germanium, and antimony to the United States—minerals critical for semiconductors, fiber optic cables, and solar cells.¹

Fortunately, Washington has an industrial policy playbook for crash‑building essential supply chains at home and with allies, even if it’s little remembered. It was written in World War II, and the critical resource in question was rubber.

In the months after Japan’s attack on Pearl Harbor in December 1941, the American economy stood on the verge of collapse. America’s wartime economy needed rubber to function: manufacturing a single tank required one ton of rubber, while a battleship required seventy-five tons.² But as the war broke out, more than 95 percent of the world’s natural rubber came from areas in the shadow of Imperial Japan.

The Roosevelt administration worked with American companies to scale production of synthetic rubber, an entirely new industry, before government stockpiles dried up. The U.S. rubber program would prove to be one of the largest and most successful industrial policy efforts since the founding of the republic. Over the course of the next three and a half years, American rubber production skyrocketed from 230 tons in 1941 to over one million tons in 1945. The program led to the construction of fifty-one plants across the nation at about one-third the cost of the Manhattan Project. Without this successful industrial policy, the Allied war effort would have stalled by 1944.

Yet, it is the rubber program’s list of stumbles and near misses that holds the most important lessons for contemporary policymakers seeking to reduce American dependence on China. Indeed, it is a wonder that the rubber program succeeded at all. FDR and his administration would not commit to building a synthetic rubber program large enough to save the U.S. economy until well after Pearl Harbor, and the president refused to delegate power necessary to make the program work. The program was riven by divisions between national security hawks worried about losing access to rubber, industry interests seeking government funding, New Deal administrators suspicious of paying for an expensive new program, and isolationists in Congress who questioned if a synthetic rubber program was necessary at all. The Roosevelt administration ignored industry expertise on how to structure the pro­gram until the war with Japan began. Yet once that public-private part­nership emerged, Congress tried to kill the program for political rea­sons. The U.S. economy was saved only by an improvised rubber stock­pile which bought time for domestic synthetic production to come online.

The troubled start of the rubber program and its eventual success illustrate the steps needed for successful industrial policy at a time of national need. Effective industrial policymaking will require overcoming several challenges: managing the fractious domestic politics of decoupling from China; forging partnerships between the government and private industry to ensure policymakers get needed expertise without corrupting the program; and building a stockpile as insurance against failures and emergencies. The rise of the U.S. synthetic rubber program not only shows that such success is possible but also demonstrates principles and practices for realizing it.

The Building Block of the Industrial Age

Rubber was an essential input to U.S. industry. Natural rubber was the nation’s top commodity import by value in the years leading up to war, with $168 million imported in 1939.³ At that time, the United States consumed half of all rubber produced globally.⁴ While tire treads and tubes were the primary wartime applications—more than forty million heavy-duty truck tires were manufactured in the United States during the war—it was also required for many other essential goods, from hoses and life rafts to belts for engines and machine tools. Mechanized warfare was impossible without it.⁵

Scientific progress in the treatment and use of rubber by European scientists led to its use first in footwear then in tires during the latter half of the nineteenth century.⁶ Natural rubber derives from latex cultivated from certain kinds of trees, primarily Hevea brasiliensis native to Brazil. That latex is then mixed with chemicals to solidify it and rolled into bales. Beginning in the 1870s, the Western imperial powers planted Hevea trees in the Far East for cultivation.

Before the war, the United States imported nearly all its rubber from plantations in British Malaya, the Dutch Indies, British India, and French Indochina. Plantations in these regions comprised 96 percent of global production of rubber. There were some minor attempts at developing non–Far East rubber supplies in the 1920s and 1930s, but these plantations only reached 5 percent of total U.S. crude rubber imports by the start of the war.⁷

Synthetic rubber alternatives were little more than a laboratory idea in the United States until the mid-1930s. The U.S. rubber market was dominated by four large firms: the Firestone Tire & Rubber Company, B.F. Goodrich Company, Goodyear Tire & Rubber Company, and United States Rubber Company. These firms had varying levels of interest in synthetic alternatives and some began building pilot plants for specialty rubbers at low volumes. Still, synthetic production cost more and was of lower quality than natural rubber. Synthetic rubber comprised less than 1 percent of U.S. consumption in 1941.⁸

The Emergency Natural Rubber Program

Before Washington had a synthetic solution to its rubber problem, it exhausted every avenue to continue using natural rubber. Leaders in Congress and the Roosevelt administration did not believe the risk of losing Far Eastern rubber supplies to Japanese conquest was serious enough to require an expensive, high-risk synthetic rubber program. Instead, Washington bet on stockpiling before the war and turned to rationing and recycling once the war began.

Washington’s concern about rubber initially bubbled up from the military. In early 1939, the Army and Navy Munitions Board notified Congress that rubber was an essential commodity and recommended a stockpile of 500,000 long tons. Congress authorized $100 million over four years to collect strategic materials, including rubber, in June 1939.⁹

Washington made its first attempt at stockpiling weeks later by striking a deal with London to exchange 600,000 bales of American cotton for 85,000 long tons of rubber.¹¹ Stockpiling did not begin in earnest until May 1940, during the Nazi conquest of France. Under Secretary of State Sumner Welles wrote to the president on May 1 recommending the United States build a government-owned stock of 250,000 long tons of rubber.¹¹ FDR approved.

To manage the stockpiling program, FDR tapped the most powerful of his patchwork of New Deal agencies: the Reconstruction Finance Corporation (RFC). Formed by Herbert Hoover during the Great Depression to backstop the U.S. banking system, the RFC had grown to become one of the largest banking institutions in the world, a sprawling, controversial experiment in state capitalism. Roosevelt signed legislation in June authorizing the RFC to launch the Rubber Reserve Company (RRC), which would create a stockpile by striking deals to buy rubber from the OPEC-like rubber cartel of the day, the International Rubber Regulation Committee (IRRC). The IRRC included Britain, the Neth­erlands, and Thailand, or 98 percent of global rubber production.¹²

Overseeing the RRC was the RFC’s longtime chairman, Jesse Jones Jr., who would become a central character in the rubber story. An imposing Texas Democrat who stood six-foot-three, Jones was a self-made millionaire who bragged of having only read a single book in his life. What he lacked in formal education, he made up for in political acumen. “Jones harbored few ideological assumptions,” notes historian James Stuart Olson. “He was in love with money and power, nurtured an incorruptible sense of personal ethics, and gave no quarter to rivals.”¹³ Holding joint appointments as the chair of the RFC, federal loan administrator, and the secretary of commerce, Jones was one of the most powerful men in Washington.

During the summer of 1940, Jones struck two deals for a combined 330,000 long tons of natural rubber. But stockpiling faced practical constraints: the emerging U.S. war economy’s rubber consumption was only growing, and there were insufficient U.S. ships available to facili­tate the rubber trade with Southeast Asia. Jones was unwilling to pay higher prices, allowing countries outside the IRRC—such as Canada, Australia, and South Africa—to purchase the rubber Washington wanted to buy.¹⁴ By the end of 1940, the RRC’s stockpile only held some 290,000 long tons of rubber. A third deal inked in May 1941 added another 100,000 long tons of rubber, but Washington’s demand for rubber skyrocketed as Washington’s assessment of the odds of war darkened.

The grave risk of losing access to Far Eastern rubber quickly became reality. The Rubber Reserve rushed to stockpile whatever rubber it still could. From Pearl Harbor to February 1942, the United States imported 114,000 tons of rubber from the Far East, virtually all the rubber available in the region.¹⁵ But Japan’s conquest of the Dutch Indies, Malaya, and Singapore slammed the door shut in the first few months of 1942. At the beginning of 1942, the United States held in stock some 530,000 long tons—roughly an eighteen-month supply for U.S. mobilization, but a far cry from the roughly 800,000 long tons which the Allies would need annually.

Washington hoped to harvest as much rubber as possible from the remaining free sources in the world. Yet supplies of rubber outside the Far East were limited, and developing new plantations was unworkable because it took six to seven years for a rubber seedling to reach maturity. Another pillar of the program sought to produce usable rubber from scrap, but reclaimed rubber performed poorly, and there was not enough to meet wartime demand. The entire war effort hinged on developing a synthetic rubber industry from scratch with government funding.

Early Plans for Synthetic Rubber

Japan’s conquests in the Far East presented Washington with two options: crash-build a domestic synthetic rubber industry or watch the United States lose the war. Without rubber, the modern industrial economy was impossible. But the rubber program that Washington chose to supercharge was still nascent at the start of 1942. The early years of the program saw pitches from industry and national security–minded officials denied primarily by government officials suspicious of the steep price tag and doubtful of the risk of war.

Breakthroughs in organic chemistry during the second half of the 1800s made synthetic rubber alternatives possible, but no real market existed until the first decade of the 1900s, when the introduction of mass‑market automobiles caused natural rubber prices to skyrocket. Building on the German government’s push to develop rubber substitutes, chemical conglomerate IG Farben developed a synthetic rubber called Buna S in 1929. While U.S. companies also managed to develop forms of synthetic rubber, only Buna S proved scalable from common feedstocks, serviceable for use in tires, and remotely cost-competitive with natural rubber. Adolf Hitler took a personal interest in Buna S, announcing in 1935 that IG Farben would build the world’s first synthetic rubber factory in Germany.¹⁶

U.S. government officials would have a choice between manufacturing rubber from industrial alcohol or petroleum. The key ingredient in Buna S rubber, a colorless gas called butadiene, can be produced from two main sources: industrial alcohol, or petroleum distillates butane (C₄H₁₀) and benzene (C₆H₆). The United States would produce much of its synthetic rubber from petroleum products during World War II. The Soviets used industrial alcohol sourced from potatoes and grain while Nazi Germany opted for coal converted to synthetic oil.¹⁷

In a move which would later pay dividends for the rubber program, American firm Standard Oil of New Jersey acquired the U.S. patents of IG Farben’s breakthrough. Ties between U.S. and German oil and chemical giants went back nearly fifteen years. In 1930, the two compa­nies set up an expansive, 50-50 U.S. joint venture to test and commercialize each company’s novel chemical and refinery processes.¹⁸ These processes included Buna rubbers, luckily for the American war effort against Nazi Germany twelve years later.

The U.S. rubber and petroleum lobbies repeatedly tried to convince the government to experiment with scaling the production of synthetic rubber. The president of Jersey Standard’s research arm, Frank Howard, was the first to do this in January 1939, and BF Goodrich executives made similar calls in August of that year.¹⁹ These calls fell on deaf ears until Germany’s conquest of Western Europe in June 1940. FDR set up an Advisory Commission to the Council of National Defense (NDAC), the first of several entities charged with mobilizing wartime production. In June, NDAC created the Synthetic Rubber Committee (SRC) to convene interested firms and draw up a plan based on their recommendations.

The Committee initially disagreed about the appropriate scale of a possible rubber program. On one side were those who wanted to launch a limited, experimental program to produce twenty-five thousand long tons of rubber per year. These members believed that the risk of war in the Far East was not high enough to demand a costly national construction project, especially given that no U.S. firm had yet produced synthetic rubber at scale. But industry representatives argued that limiting the program to such a small scale would not provide the necessary demand signal for large-scale investment. These disagreements would define the U.S. debate over the program for the next two years.

On August 5, 1940, the SRC recommended a production program for one hundred thousand tons per year for roughly $100 million. The program seemed to have a good chance of materializing. On August 14, NDAC Materials Chair Edward R. Stettinius asked Jesse Jones whether the program could borrow from RFC’s loan authority to build a network of rubber plants. The Texan seemed willing to work with NDAC. By September, however, Jones refused to cooperate. Recognizing they were outgunned, NDAC’s chairs relinquished their authority over the rubber program.²⁰ This would be just the start of the organizational problems that would weigh on the program for the next several years. As Stettinius admitted later, “it is evident that some confusion existed . . . because of the fact that two governmental agencies were in­volved.”²¹

The Rubber Program Shrinks

Jones took an immediate interest in the NDAC’s rubber plan given its $100 million sticker price. He sent mixed messages about the program to FDR in September. In one letter, he took a skeptical tack, requesting the president’s opinion on whether Congress had given RFC sufficient lend­ing authorities to pursue the effort. But in a second missive, he changed course and recommended that RFC finance construction. In Jones’s telling, FDR balked, complaining that “wealthy rubber companies . . . ought to build their own plants.”²² In another version of the story, Jones recommended the $25 million figure himself, and FDR gave his approval by simply signing his initials on Jones’s memo.²³ Regardless of how it happened, the president authorized $25 million in funding. This would be the last presidential guidance the program would receive for nearly two years.²⁴

After the handoff from NDAC to RFC, the program went quiet until November, when Jones began to meet with industry representatives. According to Jersey Standard’s Frank Howard, Jones began their meeting by immediately throwing out the NDAC’s 100,000-ton plan. “What do you think can be done for about $30 million?” he asked his industry guests; $30 million could fund a program producing about forty thousand tons of rubber a year. This figure was later revised down to the $25 million figure Jones had requested from the president. By all accounts, Jones was spit-balling. There was no technical or threat-based analysis behind a forty thousand–ton program.²⁵

Questionable analysis did not stop Jones and his government bankers. The RFC put out an overhauled version of the program based on Jones’s figures within a few weeks. Instead of using government capital to scale synthetic production as quickly as possible, as the NDAC plan proposed, the program would use market-like incentives, namely a set of purchase commitments, to produce the material as cheaply as possible.

In their bids, firms would fix a sales price per pound. For projects that were selected, RFC would buy the output at that fixed price, then sell it back to firms at the market rate for natural rubber. In exchange, the RFC would pay up to 75 percent of capital cost for construction.²⁶ This seemed smart on paper: Thanks to market-like mechanisms, firms would compete against one another to narrow the cost between natural rubber and more expensive synthetic alternatives.

Yet it quickly became clear this system would not lower costs as much as Jones hoped. RFC officials balked at the prices that firms proposed and the estimated construction costs for the plants. Some officials responded by taking matters into their own hands. In February, Jones received one unsigned memo critiquing the program, then a second from his deputy optimistically (and inaccurately) estimating that supplies of natural and reclaimed rubber could meet national requirements for two and half to three years. Jones reported these figures to FDR on February 28 but received no new guidance.²⁷

Industry representatives were growing nervous. They had not heard from RFC since submitting their bids, and whispers from Washington suggested that the program would be suspended.²⁸ Jones finally broke the silence in late March by proposing an entirely new plan. Instead of the already scaled-down forty-thousand-ton proposal, the government would finance four pilot plants that would initially produce just twenty-five hundred tons annually but could be expanded to ten thousand tons each if necessary. To Howard and his fellow rubber executives, this plan was a nonstarter. Besides cutting funding for rubber plants, it also zeroed out funding to build the butadiene plants necessary to provide inputs for the rubber factories.²⁹ Industry representatives labeled Jones’s proposal the “Shadow Plan,” since it erased the rubber program until “only its shadow remained.”³⁰

The Office of Production Management

Dissatisfied with another watered-down compromise, the Big Four took their case to a new player—the recently-established Office of Production Management (OPM), formed in early 1941 to replace the toothless NDAC. Like the NDAC, OPM lacked the political clout and statutory authority to win bureaucratic knife fights with the Army and Navy, because FDR refused to grant them.³¹ What OPM did have was a large staff and competent leadership in General Motors executive Bill Knud­sen.³²

Jersey Standard CEO Frank Howard continued to plead for a consistent demand signal. “If we are to meet an emergency,” he wrote in May 1941, “the four large companies must know in advance how to provide synthetic rubber successfully and continuously on a large scale.” He argued that it would take between twenty-four and thirty months to scale synthetic rubber production, not eighteen months as RFC had suggested.³³

Howard’s arguments resonated with OPM officials, many of whom were concerned that the rubber program was dangerously delayed. OPM Deputy Director A. I. Henderson weighed in the following week: “I believe that we should proceed immediately at government expense to erect the plants necessary to produce a minimum of 100,000 tons of synthetic rubber a year. Very probably the amount should be greater.”³⁴

Caught between agitated economic officials, an ambivalent president, and a skeptical Congress, Jones began to hedge his bets. On May 8, he appeared before the Banking and Currency committees of both the Senate and the House. Jones took pains to note that the synthetic rubber program was still speculative. But isolationists in the Senate questioned the expensive efforts to prepare for a war that may not come.³⁵

Knudsen resisted their skepticism. Though he did not press for a 100,000-ton program, Knudsen made clear to Jones that producing synthetic rubber at scale was necessary. “We should immediately make the decision to erect plants capable of producing 40,000 tons of synthetic rubber,” he wrote to Jones, while “holding our minds open for a few months until we have a better knowledge of engineering plans, with the idea that we may want to multiply this production to 100,000 or 200,000 tons.”³⁶ Jones agreed, now that he had a scapegoat to point to in case the program flopped. The United States would immediately move to scale synthetic rubber production.

RFC invited seven companies to Washington to meet to discuss a “much larger” program on May 21. At a closed-door meeting, Jones laid out his terms. The synthetic rubber program would use “Buna S” rubber (now known as styrene-butadiene, or GR-S, short for government rubber-styrene). The RRC would work to negotiate patent sharing and technical exchanges between Jersey Standard and other interested players.

Unlike Jones’s slim initial proposal, rubber and butadiene feedstock plants would be financed and owned by the U.S. government. Nearly all the fifty-one synthetic rubber plants eventually built were funded by the RFC. RFC agreed to pay construction costs and operating expenses for each plant, then leased the plants to operators for five years at a rate of one dollar per year. RFC signed offtake agreements with these firms at negotiated prices. About 95 percent of the nation’s peak wartime rubber production was financed under this arrangement.³⁷

Much of the rest of the year was spent negotiating bids and building infrastructure. By September, construction had begun on three large plants to produce Buna S totaling forty thousand tons. RRC also agreed to finance about thirty-five thousand tons of the rubber feedstock butadiene.³⁸ Butadiene could be sourced either from petroleum or from alcohol, but most officials agreed that the former would prove cheaper and easier to access. This decision would become a political lightning rod the following year.

War Abroad, Skirmishes at Home:
The Rubber Program Enters Its Pivotal Year

Everything changed with the Japanese attack on Pearl Harbor on December 7, 1941. OPM’s Henderson predicted that the United States had only enough natural rubber to last through March 1943. The rubber program had already been subject to bureaucratic turf wars and the whims of an indifferent president. But over the course of the next year, it became a central political issue. Before the administration’s program could scale, three issues would need to be resolved: patent sharing and antitrust scrutiny, unclear lines of authority to execute the program, and political controversy over the program’s winners and losers.

America’s formal entry into the war imparted newfound urgency to a sluggish Washington bureaucracy. In a change of heart, Jesse Jones persuaded FDR to plus-up the rubber program from forty thousand tons to 120,000 tons.³⁹ RRC agreed within a few weeks to expand the rubber program to 400,000 tons then to 600,000 tons before landing at a final target of 800,000 tons.

Wartime urgency also paved the way for solutions to the stubborn issue of patent sharing. Attorney General Francis Biddle on December 19 approved a plan to exempt rubber companies from antitrust law, allowing them to pool their patents.⁴⁰ In February 1942, executives from the Big Four struck a secret patent-sharing agreement with the RRC. The Big Four rubber companies agreed to produce Buna S according to Jersey Standard’s recipe, primarily using petroleum byproducts. They would also standardize their factory plans to accelerate construction. The new plan would also now include the specialty rubbers butyl and neoprene.⁴¹

Finally, administrative change came in the form of a mobilization office with real power. FDR launched the War Production Board in early 1942 to replace OPM, which had been criticized for its overlapping lines of responsibility and failure to deliver results. The WPB would have much broader authority to restrict commercial production and determine national use of strategic materials.

Despite progress behind closed doors, frustration over the missteps of the rubber program began to simmer publicly. A string of allied defeats—including Japan’s invasion of the Philippines, the stunning fall of Singapore, and the worst allied naval defeat of the war at the Battle of the Java Sea—had darkened the mood in the United States. The rubber program proved an easy scapegoat. Over the next few months, Congress would hold hearing after hearing on the rubber program.

The patent issue was the first dam to break. Despite the agreement to exempt rubber companies from antitrust enforcement, the Justice De­partment continued to investigate Jersey Standard’s prewar ties to the German chemical and rubber giant IG Farben. Testifying to the con­gressional Truman Commission investigating the defense program in late March 1942, Deputy Attorney General Thurman Arnold blamed the entire rubber shortage on the Standard Oil–IG Farben prewar rela­tionship. In the eyes of antitrust champions like Arnold, this relationship created a cartel, which then used its patents to stifle American firms from producing synthetic rubber. FDR exempted Standard from anti­trust action a few days later, but the political damage was done.

Opponents of industrial policy often complain that government involvement creates winners and losers. Over the course of the spring of 1942, this criticism came to plague the rubber program. As noted above, GR-S rubber could be produced either from petroleum products or from industrial alcohol. In their efforts to scale the program as quickly as possible, the RRC and WPB decided to use mostly petroleum feedstocks, setting off a proxy war between the oil industry and the farm lobby’s Congressional backers.

Historians disagree on why leaders of the rubber program favored petroleum-based butadiene over alcohol-based production. The first camp argues that the information available to decision-makers as the program scaled gave every indication that the rubber program should favor petroleum. The Rubber Reserve calculated that large petroleum plants would be 50 percent cheaper than grain alcohol, and Jersey Standard announced in early 1942 a new fracturing process that made production from petroleum even cheaper.⁴² Alcohol-based butadiene production remained three to four times more expensive throughout the war. Industrial alcohol was being used both for civilian goods and for the construction of explosives. Moreover, nearly all industrial alcohol used for the war effort entering 1942 was sourced from molasses imported from Cuba—vulnerable to German submarines.⁴³

The second camp blames the rubber program’s choice on a lack of technical expertise, such that the oil industry outwitted the government. The Rubber Reserve did not even have a formal staff until May 1942, instead relying on one part-time technical consultant and industry advisers. Lack of technical expertise may have caused the program’s leaders to overlook key factors, such as domestic grain availability: in early 1942, for example, farmers had a bumper crop of grain, and WPB had ruled that 60 percent of whiskey distilling capacity would be diverted to war production. Plus, given the tensions between the Rubber Reserve and the War Production Board, how could the program be expected to make well-informed decisions?

Either way, many in Congress championed the farmers’ interest. Senator Guy Gillette of Iowa emerged as the antagonist of the rubber program. Gillette was a populist Democrat with an isolationist streak who “view[ed] the corn interest . . . with an almost religious devotion,” according to a confidential profile written by Isaiah Berlin for the British Foreign Office in 1943.⁴⁴ The Senate launched the new Gillette Committee to investigate the rubber program and the feasibility of basing the program on farm products.⁴⁵

The Gillette Committee hearings in the spring and early summer of 1942 provided a platform for those left out of the program. One of the highest profile cases involved a long public debate over a technique for manufacturing butadiene from alcohol widely referred to as the “Polish process.” The administration had considered this method, invented by Polish chemist Waclaw Szukiewicz, in the first half of 1942, but concluded that it was too immature.⁴⁶ Szukiewicz himself testified before the Gillette Committee and Truman Commission to promote his method, drawing huge amounts of publicity.

Public outcry over the Polish process was so intense that Congress attempted to enact its own rubber program. The Senate and House passed the Rubber Supply Act on July 22 to launch a new program that exclusively used grain alcohol feedstocks with preferred access to equipment, materials, and financing. The program crucially would have been answerable only to Congress. Donald Nelson, head of the War Production Board, called it “probably the most unwise and unwarranted piece of legislation passed by Congress during the war.”⁴⁷ FDR vetoed the bill. In a lengthy veto note, the president explained that establishing an independent agency would “block the progress of the war production program, and therefore the war itself.”⁴⁸

FDR moved to shore up political backing for his rubber program by appointing a three-man Rubber Survey Committee to evaluate the program in August. The effort was co-chaired by industrialist and financier Bernard Baruch, who had served as war production czar during World War I, as well as chemist James B. Conant, president of Harvard, and physicist Karl T. Compton, president of MIT. These men were well-respected, influential, and generally viewed as impartial. Baruch began by contacting congressional leadership and rubber offi­cials in the executive branch, while Conant and Compton brought on two dozen technical experts to conduct hearings, interviews, and site visits.

The Committee submitted its final report on September 10, just thirty-five days after being tasked by the president. It argued that the synthetic rubber program was both necessary and technically sound. “It is better to be safe than sorry,” the report concluded. “We cannot base military offensives on rubber we do not have.” To conserve rubber until the plants came online, Baruch and his co-chairs called on the American people to limit their driving and observe a thirty-five mile per hour speed limit. It also conceded to the farm lobby and recommended additional alcohol butadiene production (though many of these plants were not ultimately built).

The report also concluded that the program suffered from unclear lines of responsibility. This conclusion mirrored the findings of the Truman Committee from earlier in the year, which had identified “lack of centralized and sole responsibility” as the program’s key fault. Baruch and his cochairs called for a single rubber administrator with “full and complete authority in regard to the manufacture of synthetic rubber, including research, development, construction, and operation of plants.”

This recommendation was an indictment of Jones’s authority over the program. The Washington Post had published an op-ed earlier in the year blaming Jones for the impending rubber shortage. “The chief reason for his failure,” it concluded, “is a boundless ambition for power that has led to his taking more jobs than he can successfully manage.”⁴⁹ Jones wouldn’t tolerate the insult: he confronted the editor of the Post at a meeting of the prestigious Washington Club, picking him up by his lapels. Once word got to the president, Jones lost his key role in the program.⁵⁰

Scaling the Program and Bouncing Back

The RSC’s report defused the political bomb threatening the program. Though the farm lobby continued to grumble, the media and the public reacted positively to the report. FDR praised the report, and on Septem­ber 11, he appointed William M. Jeffers, president of the Union Pacific Railroad, as the nation’s first rubber director. Jeffers was the first in a series of “commodity czars” who reported directly to the president. He took it upon himself to implement the recommendations of the Rubber Study Committee, referring to the report as his “chart and Bible.”

Jeffers proved to be both tenacious and effective at winning bureaucratic knife fights. These qualities helped him secure scarce plant construction materials that had slowed the program.⁵¹ His role did not entirely solve the authority problem: the Office of the Rubber Director sat within the War Production Board, but Jeffers reported directly to the White House, bypassing WPB Director Donald Nelson. FDR still favored overlapping lines of authority.⁵²

Despite Jeffers’ best efforts, the rubber program came perilously close to disaster in 1943. Shortages of rubber materially hindered the war effort and contributed to Roosevelt’s decision to delay the D-Day campaign by a year. Most of the petroleum-based butadiene plants ironically fell dramatically short of planned output: in 1943, alcohol plants made up a third of planned capacity but supplied 83 percent of the butadiene used to manufacture GR-S.⁵³ Without alcohol butadiene plants, the war effort would have collapsed.⁵⁴

How did the rubber program slip so close to disaster in 1943? One explanation is the program had to pay for Washington’s early dithering. There were also technical problems: petroleum-based butadiene plants relied on novel “cracking” processes which proved difficult to scale.⁵⁵ But the petroleum-based system was still far cheaper. Even by 1945, alcohol plants were producing butadiene at 41 cents per pound, compared to 10.5 cents per pound for petroleum plants.⁵⁶

By late 1943, the program had finally turned a corner as petroleum-based butadiene plants came online. Rubber production caught up with wartime demand in the second quarter of 1944,⁵⁷ and by July of 1944, Jeffers’ successor had resigned with a recommendation that the Office of the Rubber Director be abolished. U.S. firms produced 770,000 tons of synthetic rubber in 1944 and were on track to produce over one million tons annually by war’s end.⁵⁸

For about a decade after the war, the rubber industry operated as a government-controlled monopoly before the plants were privatized and sold (with a brief reactivation during the Korean War). The synthetic rubber program also proved to be a boon for U.S. consumers, as a reliable source of synthetic production mitigated the price swings which plagued prewar natural rubber production. Synthetic rubber supplied most global demand within a few decades.⁵⁹ Government funding for R&D and facilities also spurred tremendous innovation: by 1953, ninety varieties of synthetic Buna S were being produced commercially.⁶⁰

Policy Lessons

The U.S. synthetic rubber program holds crucial lessons for present and future efforts to reduce reliance on imports from foreign adversaries. These efforts are likely to gain steam in the Trump administration. On the campaign trail, President Donald Trump pledged a “four-year plan to phase out all Chinese imports of essential goods,” such as pharmaceuticals and electronics.⁶¹ While the scale of U.S. dependence on China for key inputs sometimes appears too deep to address, the United States has built entirely new supply chains at home and with allies before. Policymakers today can look to their forebears who waged and won World War II for inspiration.

The most important challenges are political. The story of the rubber program is as much about the shifting political coalition that supported the idea as the policy levers that made it work. The domestic rubber industry and national security hawks supported a large synthetic program years before Pearl Harbor, but they were held back by skeptical New Deal administrators and a president who failed to grasp the threat. The issue broke in the program’s favor after it became clear that a war with Japan was approaching, yet the tireless efforts of patriotic executives and mid-level bureaucrats who understood the threat ensured there was a foundation on which to build. Mobilizing support for industrial policy to reduce U.S. reliance on China today will require convincing disparate political interests that the China challenge is serious enough to justify the costs of decoupling.

After securing and sustaining political support, the most important challenge for policymakers is building an effective relationship between government and business. The U.S. government needs industry experts who understand market dynamics and technical aspects of targeted industries. But that relationship can get too cozy. Congress tried to sink the rubber program due to concerns that it unfairly bypassed the farm lobby, while the large rubber and petroleum firms which came up with the program advocated against the alcohol butadiene plants that saved the war effort in 1943.

Adequate stockpiling of key commodities is also essential. The wartime U.S. economy had to survive the decisive war years of 1942 and 1943 with the rubber it had stockpiled largely in late 1941 and early 1942. If the administration had not done so, the U.S. economy might have collapsed. The United States today is far behind in the stockpiling of critical minerals and pharmaceuticals, the supply chains of which China dominates. The National Defense Stockpile, which includes criti­cal minerals, covers about 40 percent of military needs and 8 percent of civilian demand, according to the Congressional Research Service.⁶² The Strategic Active Pharmaceutical Ingredients Reserve, designed to ensure the United States can continue producing medicines during a crisis, is reportedly 1 percent full.⁶³ Filling these stockpiles would help meet America’s basic needs for national defense and ease any shocks created by global supply disruptions. Of course, the real task is producing critical goods, not just hoarding them.

Crash-building a new domestic industry from the ground up requires unified leadership—and ideally presidential support. Even after govern­ment officials agreed a synthetic rubber industry was necessary for the war effort, and had secured financing from RFC, the NDAC and OPM were not organized or empowered to divert scarce construction materials and labor from projects that were higher priorities for the services. FDR’s ambivalence towards the rubber program left it rudder­less until well after Pearl Harbor.⁶⁴ But once the president agreed to appoint a single rubber director in September 1942, the project finally took off. If the United States were to undertake any new project to rapidly build up a critical domestic industry—say critical minerals, for instance—it would thrive best with a single unified authority, not a hodgepodge of overlapping government agencies.

The day may come when U.S. policymakers face the same choice that confronted the Roosevelt administration after Pearl Harbor: produce or lose. By learning the lessons of the rubber program and applying them now, U.S. leaders may be able to achieve another industrial policy triumph.

This article originally appeared in American Affairs Volume IX, Number 1 (Spring 2025): 64–79.

Notes