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The True Costs of the Largest Event in Human History

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On this day in economic and business history ...

Victory Over Japan Day, popularly known as V-J Day, marks the surrender of Japan and the end of World War II on Sept. 2, 1945. The six years (and one day) preceding Japan's surrender encompassed what British war historian John Keegan later called "the largest single event in human history." Rather than examining the war in detail -- which would take, and has taken, many books to achieve -- let's look at some brief numbers on the cost of that war, in human terms:

  • More than100 million people served in the militaries of more than 30 countries.
  • Around 70 million people died (estimates vary from 50 million to more than 85 million).
  • Roughly 10% of German citizens perished, and 16% of native Poles lost their lives.
  • 27 million people from the Soviet Union died as a result of the war.
  • More than 30,000 people were killed for every day the war continued.
  • Germany and Japan pressed a combined 30 million people into slave labor.

And now in economic terms:

  • The war cost belligerent nations an estimated $1.6 trillion combined.
  • That would be equivalent to $20.8 trillion today.
  • U.S. government spending peaked at more than $105 billion in 1944.
  • That was 48% of U.S. GDP for 1944.
  • Allied GDP reached a low of 1.6 times Axis GDP in 1940.
  • By the end of 1945, combined Allied GDP was five times as large as Axis GDP.
  • The Allies won, in large part, by vastly outproducing the Axis powers:

Weaponry or Materiel

Allied Wartime Production

Axis Wartime Production


Tanks and self-propelled guns




Artillery and mortars




Machine guns




Military trucks




Military aircraft




Capital ships*




Escort/support ships








Coal used

4.3 billion metric tons

2.6 billion metric tons

6.9 billion metric tons

Iron ore used

591 million metric tons

291 million metric tons

882 million metric tons

Crude oil used 

6.8 billion barrels

430 million barrels

7.2 billion barrels

Source: Wikipedia.
*Aircraft carriers and battleships.

The end of World War II also marked a shift in the American economy. As the only major combatant to have escaped with its domestic infrastructure largely unscathed, the United States was in a unique position to convert its manufacturing Arsenal of Democracy into a peacetime production juggernaut. As a result, the American economy soared, and so did the fortunes of American investors. Real gross domestic product grew more than fivefold in the five decades that followed the end of the war. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) , which had existed for 49 years before the end of the war, grew at a rather tepid annualized rate of 3.3% during those 49 years. After the war, its growth rate for the next half-century leapt to 7.9% per year.

Strange beginnings
(NYSE: UL  ) was formed on Sept. 2, 1929, by the merger of British soap-maker Lever Brothers and Dutch food-oil-product producer Margarine Unie.

The latter company had been formed only two years earlier by the amalgamation of several European companies operating in similar lines of business. Margarine Unie's origins dated to 1872 in the Netherlands, when the Jurgens and Van den Burgh families each set up margarine factories. In 1884, meanwhile, William Lever began making soap. The two companies had no real overlap until 1909, when both companies (the two Dutch margarine-makers had partnered a year earlier) set up palm plantations to supply their booming businesses. By the 1920s, each company was well aware of the other. The 1929 merger agreement came about after Margarine Unie began acquiring European consumer-products companies at a breakneck pace -- between its formation and the Lever merger, Margarine Unie came to virtually monopolize the production of anything based on oils and fats.

The multinational Unilever's growth was stymied by the Great Depression, and then by the outbreak of World War II, which prevented the company from capitalizing on its significant German operations. After the war, Unilever lost control of its interests in Eastern Europe as the Iron Curtain descended, but it continued to expand in the rest of the world nevertheless. Today, Unilever is the third-largest consumer packaged-goods company in the world, with a stable of brands that runs the gamut from its original soap and margarine foundations to Popsicles, Q-Tips, olive oil, deodorant, and iced tea.

Cash in hand
The first automatic teller machine in the United States started spitting out cash -- two years after the first ATM in the world went online -- outside a Chemical Bank in New York City on Sept. 2, 1969. Not only was it the first American ATM, but it was also the first ATM to use the now-familiar magnetic-stripe cards for account access. Wired has the story:

Don Wetzel, an executive at Docutel, a Dallas company that developed automated baggage-handling equipment, is generally credited as coming up with the idea for the modern ATM while standing in a bank line. Previous automated bank machines had allowed customers to make deposits, pay bills, or obtain automated cash -- after purchasing a one-time voucher or card from a teller. The new device was the first in the United States to dispense cash using a mag-stripe card that didn't require teller intervention.

For the time being, tellers had no need to fear for their jobs. At about $30,000 each ($178,000 in today's buying power), the machines cost more than a teller's annual salary.

And they could only dispense cash, not receive deposits or transfer money between accounts. Those features came with the 1971 version, called the Total Teller.

Today, there are more than 400,000 ATMs in the United States, and about 2.3 million ATMs around the world. American ATM users conduct more than 8 billion transactions worth at least $600 billion in cash each year. Chemical Bank continues to produce financial-industry innovations of a different sort today: You know it as JPMorgan Chase (NYSE: JPM  ) , the largest bank in America.

World War II produced the largest expansion of debt in American history -- until today. The U.S. government has piled on more than $10 trillion of new debt since 2000. Annual deficits topped $1 trillion after the financial crisis. With no existential threat to justify such an intense uptick in debt spending, millions of Americans have asked: What the heck is going on? The Motley Fool's new free report "Everything You Need to Know About the National Debt" walks you through with step-by-step explanations about how the government spends your money, where it gets tax revenue from, the future of spending, and what a $16 trillion debt means for our future. Click here to read the full report!

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Alex Planes

Alex Planes specializes in the deep analysis of tech, energy, and retail companies, with a particular focus on the ways new or proposed technologies can (and will) shape the future. He is also a dedicated student of financial and business history, often drawing on major events from the past to help readers better understand what's happening today and what might happen tomorrow.

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