Allis-Chalmers: Great Lakes Arsenal of Democracy During World War I – Winter 1962

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The Great Lakes… 84% of the continent’s fresh water… a different story in every drop.

By Walter F. Peterson

In April 1916, General Otto Falk was elected president of the Allis-Chalmers Manufacturing Company. Four major industrial firms had been merged in 1901 to form Allis-Chalmers, each bringing established leadership in various areas of heavy machinery. The Fraser and Chalmers Company of Chicago was world-famous for its mining machinery, having equipped such major installations as the Anaconda Copper Company and the Homestake Mining Company. The Gates Iron Works, also of Chicago, contributed its famous Gates Gyratory Crusher and an excellent line of cement-making machinery. Blowing engines, compressors, and an excellent tank and plate shop were the contributions of the Dickson Manufacturing Company of Scranton, Pennsylvania. However, the Reliance Works of the E. P. Allis Company, located in Milwaukee, was the heart of this industrial combine. The Allis sawmill department had assumed world leadership through the introduction of the bandsaw mill in the 1880’s and had retained that position into the new century. World leadership had also been achieved in the area of flour milling. The perfection of the roller or gradual reduction process of milling flour, by W. D. Gray in the late seventies, provided the basis for a leadership which the company has never lost. But the real prestige of the Allis Company rested in the highly efficient, enormous steam engines produced in Milwaukee under the personal supervision of Edwin Reynolds.

The merger made it possible for this master mechanic to bring one of his dreams to fruition. The erection of a new super-plant was begun almost immediately on land at the west edge of Milwaukee, now known as West Allis. At a time when most large plants had grown up in a haphazard manner, the West Allis Works of Allis-Chalmers was so planned that all work, from blueprint to finished machine, moved in one direction. This plant, which was designed to eventually employ 10,000 men, was a model of efficiency.¹

To this excellent combination of plants and products Otto H. Falk brought a genius for industrial leadership. His background included military service from 1884 when he graduated from Allen Military Academy in Chicago until 1911 when he retired from the Wisconsin National Guard with the rank of brigadier general. But this military service did not preclude participation in his family’s business interests, for in 1913 he was vice-president of the Falk Corporation, a steel foundry company, and noted manufacturer of gears and other heavy machinery. Industrial efficiency was of prime consideration to the General, and one of his first actions was to consolidate the scattered plants so that Allis-Chalmers could produce more goods at lower cost. An excellent training program brought the best men within the company to top administrative positions, thus producing the necessary internal loyalty and high morale.²

On the eve of World War I, the Allis-Chalmers Manufacturing Company was in a position to become an “arsenal of democracy.”³  However, the immediate effect of the war in Europe in the Fall of 1914, was a partial paralysis of existing business. No one knew how widely the war might spread or how long it might last. Foreign trade was violently disrupted, and as unemployment spread, the Winter of 1914/1915 became a very lean one indeed. But when recovery arrived early in 1915, it came in sweeping fashion. The basic cause was the discovery by the Allies, particularly the British, that they could not hope to win the war without buying great quantities of war materials and supplies abroad.

In our industrial society it is industry that provides the basis for military power in time of war, and Allis-Chalmers was a prime supplier of power-producing machinery.       As early as 1904 the company had boasted that it was the only one in the United States to have mastered the four powers: steam, water, gas and electricity. A decade later, Allis- Chalmers was the only company in the world to build all three types of hydraulic turbines —Francis, propeller, and impulse. The largest steam turbines in the country were being produced at the West Allis Works.

Three-quarters of the giant gas engines used primarily in steel mills bore the Allis-Chalmers trade-mark. And by the war years, the two electrical giants, General Electric and Westinghouse, had accepted Allis- Chalmers as a permanent and major supplier of electrical equipment.⁴

Obviously, a significant amount of the machinery which produced the primary power for American industry came from the Allis-Chalmers shops — and power meant eventual victory.

Because the United States became the “breadbasket of democracy” during the war, a high priority was placed not only on the production of food but on the production of processing machinery as well. The milling industry could order all the equipment it wanted, and in some cases mills ordered more than they needed, storing equipment for future use. Since Allis-Chalmers was the primary manufacturer of grain milling equipment, it received the lion’s share of all orders, sales in 1919 tripling those of 1915.

The demand for lumber also increased during the war. Mills were rebuilt, and old equipment was replaced to help fill government requirements. In addition, it was found that spruce was the strongest and toughest soft wood for its weight, and ideal for the airplanes of the period. The demand for spruce was so great and so sudden that the United States Signal Corps formed a Spruce Production Division with headquarters in Portland, Oregon. In furnishing equipment for the production of spruce lumber, Allis-Chalmers played a more important role than any other manufacturer in the United States. When old spruce mills, remodeled and improved, still could not satisfy the demand, Allis-Chalmers was called on to furnish two completely new lumber mills at Port Angeles, Washington, and Toledo, Oregon. With such demand it was little wonder that sales of wood processing machinery rose from a quarter million dollars a year in 1915 to nearly a million and a quarter dollars in 1919.

Those Allis-Chalmers products mentioned thus far were all standard product lines for the company. But as early as November 1914, Charles M. Schwab of Bethlehem Steel was in London arranging for munitions contracts. Although he returned to the United States late that month announcing that a business revival was imminent,⁵  it was not until March of 1915 that this prosperity began to reach Allis-Chalmers in the form of a subcontract for shells for Bethlehem Steel. Immediately upon announcement of this contract, the German-American Alliance adopted the following resolution: “Shrapnel shells are manufactured by the Allis-Chalmers Company. We greatly regret that shells are being made for such purposes.  Furthermore, we regret that a man in whose veins runs German blood is the head of a concern that makes weapons to be used to kill the Germans.”⁶  General Falk, though always friendly to Germany in the past, had also been an outspoken advocate of democracy as represented by British and American political institutions. The criticism raised no question in his mind, and production of shells by Allis-Chalmers proceeded apace.

The contract with Bethlehem Steel was for 1,750,000 3.3” British shrapnel casings and 1,000,000 3.3” British high explosive casings. Once we entered the war, Allis-Chalmers produced 1,000,000 75 mm. high explosive casings for the United States Government. In the process the company designed and manufactured a complete line of special single purpose machines for the manufacture of shell casings. These were used by other shell casing manufacturers in Italy and France as well as in the United States.

As the shortage of skilled labor became ever more acute, the company hired whatever men were available for this repetitive type of work. One machinist reported: “It is a continuous circus out there. Lathes are being run by tailors, carpenters, shoemakers and all kinds of men.” Even under these conditions a high level of efficiency was maintained. By the end of August, 1915, Allis-Chalmers was turning out close to 10,000 shells a day in their “closely guarded” shop. The company received the following citation from the ordnance Department for this major contribution to the war effort:

Having no other space available, the Allis-Chalmers Manufacturing Company of West Allis, Wisconsin, cleared off the south end of the ground floor of its Pattern Storage building and on a space 160 x 250 feet undertook a contract for 75 mm. high explosive forged steel shell.  Its daily production which ran from 7500 to 9550 was the second largest from any plant in the country irrespective of size and was declared by the visiting foreign commission, British, French, Italian and Belgian to be the highest in the world per square foot of space occupied.⁷

Maintaining this level of production became a constantly increasing problem as the competition for materials became ever more acute. President Falk gave notice to the salesmen and department managers to be careful about promising definite delivery dates, for the company was experiencing increasing difficulty in securing materials. As early as March, 1916, bars and plates that ordinarily had a delivery time of 30 to 60 days were then requiring a minimum of four months. As the tempo of the war effort increased, the situation became worse: “We have recently had quotations on cold rolled steel with shipping promise of one year.” G. William Warner recalled that purchasing agent Fred Haker was often called on to take a flying trip to the East to find a billet of steel and bring it back in a baggage car.⁸

Soaring costs of materials posed another problem. An indication of the incredible rapidity with which prices rose can be seen in the percentage increases of some crucial materials from March 1915 to March 1916.

Copper                   100%
Pig Iron                 60%
Tool Steel              600%
Steel Castings        33%
Forging Billets       150%
Steel Plates        300%
Electric Steel      150%
Tin                         50%
Lead                      150%
Manganese             1000%

This was now a seller’s market, and President Falk reminded his men that “orders that do not carry a profit are unattractive under existing conditions.” This did not mean that the company was making exorbitant profits, but that it was entitled to a “fair return.” While the prices authorized often appear high in comparison with those previously quoted, salesmen were assured that they carried “no more than a reasonable profit.”

General Falk considered war the enemy of the economic stability necessary to plan and build business ventures wisely. When war did come, the constant emphasis was placed on the standard product lines. By the end of 1915, the war orders constituted less than 20 per cent of the company’s product. Save for the shell contract, Allis-Chalmers refused to accept war orders which would require special equipment or special organization because the General did not want temporary business to interfere with the regular product lines. Rather, he advocated that in a seller’s market Allis-Chalmers should take advantage of war orders to improve and increase its equipment and experience in the standard lines, so that the company would be better able to serve its customers when peace was restored.⁹

Allis-Chalmers’ Reynolds-Corliss engines had gained world-wide reputation because of their remarkable economy, efficiency and reliability. As a result of this excellent reputation, the company received an order for seventy-seven 18” x 36”, 350-horsepower, single-cylinder Corliss engines for the Du Pent powder plants then being erected. In spite of material shortages, August Werner, boss of the engine erecting shop, was able to maintain a remarkable production record, of one of these engines a day for seventy-seven consecutive working days. Known as “the man who always had an ace in the hole,” he made it a practice to keep parts on hand for nearly a complete engine, so that if the production process was in any way disrupted, he could still maintain his production schedule.

Because of the excellence of its equipment, the efficiency of its plants and the diversity of the products, Allis-Chalmers during World War I was able to move into a field related to its previous experience; the field of maritime products. Hundreds of tons of steel plate were fabricated and drilled for cargo vessels built at Hog Island by the Submarine Boat Corporation. Work was done on 16-inch gun turrets, and forty-five 16-inch gun slides and mounts were produced as well as 5- and 6-inch gun barrels. However, most of the gun slides and mounts were never installed; the battleships for which they were intended were scrapped by the action of the Washington Naval Conference following the war. The company also made forgings for marine engines, produced by other builders, as well as propeller and line shaftings. These special orders for marine and naval products were given to Allis-Chalmers because the West Allis Works was so well equipped for such production.

The famous Reynolds triple expansion pumping engine had long been one of the company’s standard products, and a triple expansion marine engine operated, of course, on the same principle. AS a consequence, Allis-Chalmers was asked to produce twenty 1400-horsepower marine engines for the wooden ships of the emergency fleet, together with nine 2000-horsepower and twenty 2800-horsepower engines for other cargo vessels. The first triple expansion marine engine contract was with the Grant Smith-Porter-Guthrie Company of Portland, Oregon, for eight 1400-horsepower engines with a 19 x 32 x 56 x 36 stroke. Dated October 4, 1917, the terms called for 10 percent of the total contract price when the contract was executed, 20 percent when the principal castings and forgings were made, 20 percent when the principal castings and forgings were machined, 25 percent when the engine was erected in the shop, and the remaining 25 percent when the complete shipment was made. The total shipment weighed approximately 1,036,000 pounds with one-third of this total shipped on the Chicago Northwestern Railroad to Minnesota and then by the Northern Pacific to Oregon. The remaining two-thirds was shipped on the Milwaukee and St. Paul road to Minnesota and then west on the Great Northern.¹⁰

On February 19, 1918, Irving H. Reynolds, nephew of the more famous Edwin Reynolds, wired the company office in Seattle:

Have entered order eight additional engines for Grant Smith per your telegram nineteenth stop Will try to ship first engine five months but feel it may be impossible because at that time we shall be completing last engines of original Grant Smith order and first engines of Sloan order thus bunching shipments but probably can deliver last engines at higher rate than two per month.¹¹

The order from Sloan Shipyards Corporation of Olympia, Washington, was for four engines to the same specifications as the sixteen for the Grant Smith Company. The Hanlon Dry Dock and Shipbuilding Company of Oakland, California, ordered twelve 2000-horsepower vertical triple expansion engines as of May 3, 1918; and the United States Shipping Board, Emergency Fleet Corporation of Philadelphia placed an order on August 31, 1918, for twenty 2800-horsepower engines. With a total of 52 engines to deliver, the company set up a production schedule calling for the delivery of one engine every ten days.¹²

The production schedule established by the Hanlon Dry Dock Company called for the keel of the first ship to be laid on July 19, 1918; the engine to be delivered no later than October 16; the launching to take place on November 16; and final delivery date for the completed vessel on February 16, 1919. The rapid rise in cost of materials is reflected in the two Hanlon contracts. The price for six 2000-horsepower engines on May 3, 1918, was $565,500. The second contract for six identical engines dated November 25, 1918, and allowing the same margin of profit came to $600,000.¹³ The last launching of the Hanlon Dry Dock Company was in 1921, but it is interesting to note that as of 1959 one of these ships equipped with an Allis-Chalmers engine was still in operation. Originally commissioned as the Medon, the name was later changed to the Mary Olson.  The gross tonnage of the 320-foot vessel was listed as 3474 tons.¹⁴

A letter from the Grant Smith Company dated February 1, 1919, to the Seattle office of Allis-Chalmers is no doubt indicative of the quality of all the triple expansion engines delivered by the company during the war:

Gentlemen:

During our construction for the Emergency Fleet Corporation, we have received engines from some eight different firms, and we wish to take this opportunity to compliment you on the quality and the excellence of workmanship in your engines. Your firm is especially to be commended because you have not allowed the hurry and rush of war work to lower your standard of workmanship.

Yours truly,

Grant Smith-Porter Ship Company By P. N. Carlson

The largest single order filled by Allis-Chalmers up to World War II was for $7,950,000 worth of marine main propulsion turbines and attendant fittings for 34 destroyers. These turbines were made to plans drawn by Warren Flanders of Westinghouse. The Westinghouse Company recommended Allis-Chalmers for the job because of its reputation as a builder of fine machinery. Although Allis-Chalmers was the smallest of the three major turbine builders of the day, it was actually best-fitted for the job, for it had the most stable shop and most experienced personnel. Since each destroyer had two shafts, the company produced a total of sixty-eight units, each with a high and low pressure turbine for a total of 750,000 horsepower.

Fourteen United States Torpedo Boat Destroyers, numbers 185 on, were built at Newport News. Twenty identical destroyers, numbers 231 on, were built by the New York Shipbuilding Company. The Clemson, built at Newport News, set efficiency records for all ships of her class while the Brooks, built at New York, set the speed record for her class. Both were equipped with Allis-Chalmers turbines.

While the Allis-Chalmers turbines met the efficiency specifications and the ships met the speed requirements, the process of naval inspection and acceptance was totally new to the company. Commander J. H. Rowan and forty-two naval inspectors were stationed at the plant during the production of the steam turbines. To test these turbines, a special steam boiler was built which subjected the cylinders to 500 pounds of pressure. The cylinders were tested by holding a mirror around the joints and some other parts of the cylinder. If no vapor appeared on the mirror, the cylinder was pronounced tight, and accepted. The turbines also had to pass acceptance tests at the shipyards, and final acceptance came 15 months from 12 o’clock noon of the day the trial voyage was made. Only then did Allis-Chalmers receive final payment.

On November 11, 1918, thousands of Allis-Chalmers workers spontaneously left their work upon news that victory had at last been won! With pieces of tin, sheet steel — anything they could find that would make noise — they paraded for miles down Milwaukee’s Grand Avenue. General Otto Falk, whose dynamic leadership had provided the basis for the company’s brilliant record during the war, appraised the situation a bit later in a less dramatic fashion:

The Company has endeavored to pursue a course which would enable it to meet present-day problems and at the same time build for future permanent success and what has been thus accomplished is directly due to the splendid effort and hearty co-operation of the Company’s employees.¹⁵

The challenge had been met; Allis-Chalmers had been an arsenal for democracy; the war had been won.

 

1. The First Hundred Years, 1847-1947, Allis-Chalmers Manufacturing Company, 1947, Also, Pioneer Power, A Story of the Growth and Development of Allis-Chalmers Manufacturing Company, Allis-Chalmers Manufacturing Company, 1942, passim.
2. Walter Peterson, “Otto Falk of Allis-Chalmers,” Historical Messenger of the Milwaukee County Historical Society, March, 1961, pp. 26-29. Also, Walter F. Peterson, “Falk of Allis-Chalmers, Professional Industrialist,” paper pre- sented at Annual Meeting of the State Historical Society of Wisconsin, 1961.
3. The phrase “arsenal of democracy” is taken from a Message to Congress delivered by President Franklin Roosevelt on January 6, 1941.
4. A-C Views, September 27, 1954, pp. 2-12. Also Walter F. Peterson, “Built to Last — The Allis-Chalmers Gas Engine,” Wisconsin Academy Review, Spring, 1961, pp. 63-66. W. W. Nichols to Walter Geist, June 2,
5. Walter Minis, Road to War, (New York, 1935), p.
6. The Milwaukee Journal, March 20, 1915. General Samuel Pearson failed in an attempt to secure a court injunction to prevent the Allis-Chalmers Manufacturing Company from manufacturing munitions of The Milwaukee Journal, May 21, 1915; The Milwaukee Sentinel, May 20, 1915.
7. History of the Chicago District, United States Army United States Government, 1918. Extract in Allis-Chalmers files.
8. W. Warner, “What Allis-Chalmers Did During the Last War,” undated MS. Sales Bulletin, March, 1916, p. 1.
9. Third Annual Report (1915), 8. Sales Bulletin, August, 1916, p. 2; Sales Bulletin, December 1915, p. 1.
10. J. Kern to author, June 15, 1961. Order 2066, entered October 4, 1917, with Grant Smith-Porter-Guthrie Co.,   Seattle, Washington.
11. Order 2137, entered March 13, 1918 with Grant Smith-Porter Ship Co., St. Johns, Oregon.
12. Order 2153 entered February 7, 1918 with Sloan Shipyards , Olympia, Washington. Orders 2138 and 2139 entered May 3, 1918 and November 25, 1918 with Hanlon Dry Dock and Shipbuilding Co., Oakland, California. order 2136 entered August 31, 1918 with U. S. Shipping Board, Emergency Fleet Corp., Philadelphia, Pa.
13. Orders 2138 and 2139 entered May 3, 1918 and November 25, 1918 with Hanlon Dry Dock and Shipbuilding , Oakland, California.
14. Malcolm Maloney to author, June 13, 1961. Record of the American Bureau of Shipping, (New York, 1959), p. 964.
15. Otto Falk, Sales Bulletin, December, 1919, p. 27.

 

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About the Author:

Dr. Walter F. Peterson is Chairman of both the Department of History and the Social Science Division of Milwaukee-Downer College, Milwaukee, Wisconsin, and has been Consultant in History to the Allis-Chalmers Manufacturing Company for the past three years.

Since receiving his Ph.D. in history from the University of Iowa, in 1951, he has been a Visiting Professor of History at Ball State Teachers College, Muncie, Indiana, and the University of Wisconsin, at Milwaukee, during several summers. Currently, he is President of the Wisconsin-Illinois Chapter of the American Studies Association, Director of the Milwaukee County Historical Society, Vice-Chairman of the World Affairs Council of Milwaukee, and President of the Milwaukee Chapter of the American Association for the United Nations.

Dr. Peterson has also written articles for a number of other historical journals.

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