Métodos a utilizar para el estudio del caso

The creation of the Clearance and Warehousing Divisions signalled a significant organizational change designed to cope with the flood of surpluses after the war. Predictably, the Supply Department’s workforce grew in proportion to its surging workload. Over the fiscal year of 1946-1947, Malley’s Supply Department accounted for the vast majority of the WAC’s payroll: roughly 74 percent of all employees worked in Supply. In March 1947, the Department employed 7,314 of the 9,919 workers on the WAC’s entire payroll, while the Clearance Division alone employed 1,899, down from its peak of 1,970 in December 1946. By contrast, the entire Merchandising Department employed 1,544 (or about 16 percent of the total workforce) and all other Departments accounted for the remaining 1,061 workers (or 10 percent).3 These employment statistics indicate much about the changing nature of the WAC’s operational practices, the

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quantities entering its possession, and the urgency of clearance and warehousing duties in supporting the transition from war to peace.

Clearance was one of the WAC’s most important contributions to Canada’s postwar reconstruction. On the government’s dime and time, almost every single facility or factory that had produced or housed munitions and supplies was cleared by the WAC. The Clearance teams (or private contractors hired in some cases) were also responsible for collecting surplus assets from military installations, airfields, shipyards, or bases. By March 1947, the WAC had received a total of 40,428 requests for clearance operations across the company’s five regions and Newfoundland. This was an astounding figure that could have easily crippled operations, yet the teams moved quickly. Of the 40,428 requests about 27,800 or 69 percent were completed by March 1947. A year later, the total number of clearance requests reached 44,399 while 41,285 or 93 percent was completed, leaving only 3,114 outstanding in March 1948.4 Indeed, operations progressed so rapidly that by August 1947, Malley started pressing his deputy, C. E. Elliot, to get Regional Supply Managers to cut staff as quickly as possible. Malley was concerned about reining in salary and wages which accounted for “approximately 75% of our total expenses” and this had to be “vigorously attacked in order that our overall expenses are commensurate with the Corporation’s earnings” (which were decreasing from the previous year due to the shrinking number of big-ticket items in the WAC’s inventories).5

The efficiency of Clearance teams depended on carefully controlling operations and closely cooperating with other organizations and stakeholders. The Clearance teams operated on strict “controlled lines” that allowed inspectors to triage assets quickly according to several categories: capital assets (anything in saleable condition), tools and gauges (production equipment and precision instruments), and aircraft. Everything that did not fall into these categories, was worn out, or considered dangerous was categorized

4

War Assets Corporation Third Annual Report, 10; War Assets Corporation Fourth Annual Report, (April 1, 1947 to March 31, 1948), 7.

5 _{LAC, RG101, Vol. 1, File: R-1-1-7, “Re: Plant Clearance,” H. R. Malley to C. E. Elliot, 18 August 1947.} See other correspondence in this file on the organizational consolidation and reduction of staff.

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as scrap.6 Triaging assets depended on close collaboration between the Clearance teams and declaring agencies. In regards to the armed forces, special sections were established to process stores originating from each Service The formation of specific army, navy, and air force sections greatly streamlined a large portion of the Clearance Division’s work, as each section processed only clearance requests from the corresponding Service. This also ensured that close liaison and familiarity developed between the WAC’s inspectors, the various disposal officers from each Service, and those personnel stationed at the locations where surpluses were declared.

Largely a product of necessity and experience, the close coordination between clearance teams and declaring agencies was essential for the proper handling of all surpluses and ensuring that only dangerous items without peacetime applications were singled out for destruction. Clearance inspectors and service personnel relied on each other to inspect and categorize items. For instance, Clearance teams and RCAF maintenance personnel jointly inspected surplus aircraft and their component parts in order to consider their “airworthiness” so that no dangerous or jerry-rigged items were sold on civilian markets.7 Furthermore, the disposal of secret technologies and equipment required special care, not only to ensure that the objects were mutilated to preserve their secret nature, but also to limit the amount of personnel gaining familiarity with designs, features, and purposes. In the case of ASDIC, the codename for the first generation of SONAR, the Navy took the precaution of removing the equipment before declaring vessels surplus.8

Clearance teams also cooperated closely with the DMS and war contractors when entering their facilities and factories. In all cases, the Clearance teams were preceded by

6

LAC, RG101, Vol. 1, File: R-1-1-9, “Clearance Division Procedures,” 19 November 1945, 1-9; War Assets Corporation Third Annual Report, 8-9.

7 _{LAC, RG101, Vol. 6, File: 9-5-2, “Aircraft Material to be Sold as Pedigreed Stock for Air Use,”} Merchandising Department Procedure No. 7.01, 4 March 1946; Ibid, “Aircraft, Aero Engines, and Aeronautical Equipment For Air Use,” Merchandising Department Procedure No. 4.01, 23 May 1946; Ibid, “Obsolete, Non-Flyable Aircraft,” Merchandising Department Procedure No. 7.04, 20 December 1946. 8 _{LAC, RG101, Vol. 1, File: R-1-1-9, “History of War Assets Corporation,” 15 July 1950, 14; Ibid,} “Statement Prepared for the House of Commons Special Committee on War Expenditures and Economies,” 14 May 1946; Ibid, “Clearance Division Procedures,” 19 November 1945, 5-6; LAC, RG24, Vol. 11121, File: 70-2-5B Vol. 1, “Disposal of Surplus Vessels – ASDIC Equipment,” Secretary of Naval Board, 24 May 1945.

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three different groups of inspectors and technicians. Employees from Canadian Arsenals Ltd. (CAL), a new crown company established in September 1945 to maintain a postwar government-run munitions industry, and personnel from the Plant Decontamination Committee (PDC) inspected all facilities and factories in conjunction with the contractor’s employees. Together they decided what was surplus to their needs, what needed decontamination, and what was required for postwar munitions production. CAL inspectors used a colour-coded tagging system to easily sort and separate the assets. Green tags indicated that the item was surplus and in saleable or good condition. Yellow or blue tags indicated that the equipment was government property required by CAL and it would handle removal. Red tags meant that CAL inspectors considered the assets surplus and scrap materials.9 However, to guard against the needless scrapping of items with residual value, clearance inspectors did not simply rely on the declaring agency’s classifications and tagging. Instead, they made their own judgments through onsite inspections. To determine an item’s reusability, they appraised its salvageable materials and component parts. Therefore, Clearance inspectors became the primary filters for disposal, as they evaluated the condition of assets and whether they were suitable for sale, storage, or destruction.10

Once the tagging process was finished, the PDC moved in to decontaminate the facilities and equipment. The PDC was established by the DMS over the summer of 1945 to undertake extensive cleanup operations at munitions factories and proof ranges. At many of these factories the volume of production, especially of explosive compounds, had been so great that particles and residues had impregnated everything (the walls, roof, floors, uniforms, machinery etc.) at facilities and even polluted the surrounding landscapes.11 These sites required remediation because the public’s general safety was at

9 _{LAC, RG101, Vol. 1, File: R-1-1-9, “Clearance Division Procedures,” 19 November 1945, 3-4; LAC,} RG101, Vol. 4, File: 5-6-1, “Canadian Arsenals Limited – Terms of Reference,” Berry to Malley, 8 September 1945, 1-3; Ibid, “Supply Department Procedure, Canadian Arsenals Limited,” 14 August 1946, 1-2.

10 _{LAC, RG101, Vol. 1, File: R-1-1-9, “Clearance Division Procedures,” 19 November 1945, 1-9; War}

Assets Corporation Third Annual Report, 8-9.

11 _{LAC, RG28-A, Vol. 156, File: 3-P-13, Plant Decontamination Committee, various meeting minutes and} correspondence, August-October 1945; Archives of Ontario (AO), F 2082 General Engineering Company (Canada), Box 3, F 2082-1-1-7 “Decontamination and Desensitizing,” 1945-1946; Ibid, Box 3, F 2082-1-1-

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risk. As Howe stated in a 9 October 1945 radio speech announcing the creation of the PDC (which had been active since July), “following the First Great War a number of accidents, some of which were fatal resulted from careless disposal of plants and equipment used for making explosives and filling shells.”12

Under the supervision of a variety of experts from the DMS’s ammunition, weapons, and explosives branches, the PDC was assigned “the duty and responsibility” to investigate and decontaminate all munitions plants “which have become dangerous by reason of impregnation with explosives” and, in the cooperation with the contractor, render the facilities as safe as possible so they could be dismantled or reconverted or sold. Eventually the PDC was transferred into the WAC in August 1946.13

While the WAC’s Clearance teams had little to do with the actual desensitization or decontamination work, its employees entered problem areas relatively quickly after the PDC finished or even as the work was progressing. Dangers lurked everywhere, especially at the larger chemical and explosive factories like the DIL plant in Nobel or the various surplus proof ranges utilized by the DMS and DND to test weapons and ammunition or train soldiers in their use. Despite proper safety precautions and experienced workers, decontamination and clearance could be dangerous, not only because explosive compounds and poisonous chemicals permeated everything in munitions factories, but the job also required the movement of heavy machinery or the dismantling of entire facilities. In late November 1945, one fatality occurred at the DIL plant in de Salaberry when a worker fell off a ladder while dismantling part of the plant for the PDC.14

Once the PDC finished its work, the WAC was informed and a Clearance team was dispatched. At the facilities Clearance teams re-inspected and categorized everything in conjunction with the declaring agency. However, they did not immediately remove assets

8 “Desensitizing Scarboro Plants,” ca. 1945; Ibid, Box 3, 2082-1-1-9 “Disposition of Records – Drawings & Specifications,” 1945; Ibid, Box 3, F 2082-1-1-10, “Disposition of Records,” 1946.

12 _{LAC, RG28-A, Vol. 156, File: 3-P-13, Radio Speech by C. D. Howe, 9 October 1945.}

13 _{Ibid, “Re: Plant Decontamination Committee,” G. K. Sheils, 20 July 1945; Ibid, Radio Speech by C. D.} Howe, 9 October 1945; Ibid, H. R. Malley to Lt.-Col. G Ogilvie, 12 August 1946. See also: Ibid, Plant Decontamination Committee – Meeting Minutes, various minutes 1945-1946.

14 _{LAC, RG28, Vol. 156, File: 3-P-13, “Minutes of the Meeting of the Committee Dealing with the} Decontamination of Buildings and Equipment,” 4 December 1945, 4.

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from the factories. After making their initial assessments, inspectors had to file their reports with the Warehousing Division in order to confirm if storage space was available nearby. In the interim, the equipment was usually tucked away in an empty portion of the contractor’s facility, unless a special request was made for immediate removal because the facility was too small. When surpluses were removed inspectors issued receipts to contractors. Quite often contractors, who had assisted with the surveys and decontamination, wanted to purchase green-tagged items or other materials for use in their factories. In these cases, the WAC’s Clearance teams noted the contractor’s requests on the proper forms and representatives from the Merchandising Department followed up to negotiate the sale.15

This practice was common and the WAC’s preferred “Plan A” method for clearing plants. The “Plan A” scheme was configured specifically for either the objects already considered surplus crown property or items not yet declared surplus but the government was willing to sell them anyway. Under the procedures of “Plan A” contractors made an inventory of all tools, products, and materials left over in their factories. This inventory was then reviewed with the CAL, PDC, and WAC during their onsite inspections. After determining ownership and what was surplus, a time-line for the physical removal of assets was established based on the contractor’s requirements. At that point contractors identified which assets they wanted to purchase from the government through the WAC.16 Provided that there were no priority requirements, the WAC was happy to oblige contractors with onsite sales since it saved the additional logistical and marketing costs while also ensuring the most direct route for reuse.17

The “Plan B” method for plant clearance was slightly different. It was reserved for situations in which the contractor wanted reimbursement for work (completed or

15 _{LAC, RG101, Vol. 1, File: R-1-1-9, “Clearance Division Procedures,” 19 November 1945, 9-17.} 16 _{Ibid, “Clearance Division Procedures,” 19 November 1945, 9-17. See also: LAC, RG28, Vol. 213, File:} 196-2-54, Manual of Procedure on Termination of Contracts, (Ottawa: Department of Munitions and Supply, February 1944).

17 _{LAC, RG2, Vol. 79, File: C-85, Disposal and Peacetime Use of Crown Plant Buildings, 23; LAC,} RG101, Vol. 7, WAC – Board of Directors, Meeting Minutes, 9 November 1944. See also: LAC, RG28, Vol. 21, File 70, “War Contracts Depreciation Board Confidential Narrative of its War Activities,” 32; LAC, RG101, Vol. 1, File: R-1-1-9, “Clearance Division Procedures,” 19 November 1945, 11; War Assets Corporation Third Annual Report, 8.

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incomplete) or if the assets and materials tagged as surplus were not already crown property. “Plan B” took more time to resolve as the Contract Settlement Board became involved and the inventory lists were heavily scrutinized since they were now entwined with the formal settlement of cancelled war contracts.18 “Plan B” scenarios developed out of situations where companies had taken advantage of accelerated depreciation (or the other fiscal measures enacted for industrial mobilization) to make private purchases of, for instance, single-purpose machine tools for ammunition production. These assets were not required by private firms after the war but they were not crown property, so an exchange of title and financial settlement had to take place before they were removed by Clearance teams.19

The disposal of machine tools and equipment exemplifies the clearance process. When Canada went to war in 1939, the previous decade of economic turmoil and idle industry had left the country with a desperate shortage of machine tools. In 1939 Canadian industries possessed about $58 million worth of machines tools or roughly 30,000 individual units, two-thirds of which were estimated to be at least thirteen years old.20 This shortage of machine tools was rectified by the DMS when it created a crown company, Citadel Merchandising, in June 1940 to control, purchase, and distribute machine tools for the war effort. In just four years, Citadel spent $160 million purchasing tools in the United States and it authorized roughly $92 million in additional purchases by war contractors through the War Industrial Expansion Program ($60 million) or from the contractor’s own accounts ($32 million). This brought the total wartime expenditures on machine tools to about $250 million for the purchase of approximately 45,000 new units. Adding those figures to the existing totals and accounting for the scrapping of some derelict machinery, by 1944 there were about 70,000 machine tools in the country worth around $300 million.21

18

LAC, RG101, Vol. 1, File: R-1-1-9, “Clearance Division Procedures,” 19 November 1945, 9-17. 19 _{Ibid, “Clearance Division Procedures,” 19 November 1945, 11-12.}

20 _{LAC, RG101, Vol. 4, File: 1-1-13, CAAC Meeting Minutes, 23 February 1944, Schedule G.} 21

Canada, the UK, and the US all doubled the number of machine tools in their respective countries. Citadel Merchandising gave birth to the machine tool industry in Canada. In 1942, it banned the importation of machine tools from the US in order to help foster the growth of Canadian firms producing this precious machinery on contracts with the federal government. As a result, employment boomed in the

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The increasing involvement of the state in acquiring machine tools meant that by 1945 most of the most advanced and newest machinery was owned by the government. Moreover, the DMS had also kept machine tools as mobile as possible during the war since shortages of production machinery often followed the distribution of war contracts. As a result, the DMS resorted to moving them from factory to factory so companies could meet their contractual obligations. Naturally, businesses were apprehensive about the government’s disposal plans and eager to acquire the tools for peacetime production before it removed them. Even before the Allies had landed in Normandy on D-Day, businessmen were anticipating peace and “thinking of their post-war situation and their desire to get into peacetime production at the earliest.”22 As early as February 1944, officials in the DMS and CAAC began forming a plan, but they discovered that – much like with other commodities – the disposal of machine tools was fraught with difficulties. Since the armed forces needed an industrial base for future defence procurement, it was difficult to forecast how many tools would be surplus. Moreover, a third of all types (about 82$ million worth) were single-purpose machines that “were chiefly for turning out special war work such as shells and ammunition.”23

Aside from defence procurement this machinery was worthless to the peacetime economy, while a large portion of multi- purpose machines would be worn out from continuous operation.

Out of these developments and considerations emerged the disposal and clearance strategy for machine tools. The CAAC and WAC worked with CAL, Citadel Merchandising, and the Machine Tool War Service Committee to set prices, inspect machines, and maintain custody of those tools needed for future munitions production. The CAAC and WAC used “Plan A” and “Plan B” methods to meet their obligations for disposal and clearance. In general, the two plans were very flexible and worked well in almost all situations. In regards to machine tools specifically, both plans contained special provisions that balanced the pressing need for strategically allocating surpluses to educational institutions with the expediency of kick-starting postwar production at the

machine tool industry from virtually zero to 2,500 workers in 1942, but it settled around 750 in 1944. LAC, RG101, Vol. 4, File: 1-1-13, CAAC Meeting Minutes, 23 February 1944, Schedule G.

22 _{Ibid, 23 February 1944, Schedule G.} 23 _{Ibid, 23 February 1944, Schedule G.}

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contractor’s factory. Although priority holders were technically entitled to the machinery before contractors, Canada’s disposal administration understood how important machine tools were for all types of businesses, large or small. In particular, the CAAC recognized that the “small machine shop operators” needed special assistance in acquiring modern models to replace their old or worn out machines because “without new equipment they would have difficulty in surviving financially in peace time.”24

Largely based on the recommendations and input of individual businesses, the flexible approaches of “Plan A” and “Plan B” helped cater clearance operations to the needs of industry and onsite sales of machine tools were conveniently exempted from priority claims.25

As the graph below indicates, the bulk of machine tools declared surplus were sold in the three fiscal years immediately following the war. According to the WAC’s annual reports, sales were primarily concentrated in 1945 and 1946, and few were sold before April 1945 or after March 1948. It is possible that sales took place before and after this period since the annual reports only listed sales over $5,000 (so any sale under that threshold was not recorded), but in these cases sales would have been for small quantities of useable machines in good condition or for worn out machines at seriously depreciated