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17-08-2015, 00:58

Mobilizing the Economy

America’s entry into the Great War determined its outcome. The Allies were running out of money and supplies; their troops, decimated by nearly three years in the trenches, were exhausted, disheartened, and rebellious. In February and March 1917, U-boats sent over a million tons of Allied shipping to the bottom of the Atlantic. The outbreak of the Russian Revolution in March 1917, at first lifting the spirits of the Western democracies, led to the Bolshevik takeover under Lenin. The Russian armies collapsed; by December 1917 Russia was out of the war and the Germans were moving masses of men and equipment from the eastern front to France. Without the aid of the United States, the Allies would likely have sued for peace according to terms dictated from Berlin. Instead American men and supplies helped contain the Germans’ last drives and then push them back to final defeat.

It was a close thing, for the United States entered the war little better prepared to fight than it had been in 1898. The conversion of American industry to war production had to be organized and carried out without prearrangement. Confusion and waste resulted. The hurriedly designed shipbuilding program was an almost total fiasco. The gigantic Hog Island yard in Maine, which employed at its peak over 34,000 workers, completed its first vessel only after the war ended. Airplane, tank, and artillery construction programs developed too slowly to affect the war. The big guns that backed up American soldiers in 1918 were made in France and Great Britain; of the 8.8 million rounds of artillery ammunition fired by American troops, a mere 8,000 were manufactured in the United States.

"Enlist”—a poster by Fred Spear, published in June 1915 by the Boston Committee of Public Safety—evoked the drowning deaths of women and children on the Lusitania.

Congress authorized the manufacture of 20,000 airplanes, but only a handful, mostly British-designed planes made in America, got to France.

American pilots such as the great “ace” Captain Eddie Rickenbacker flew British Sopwiths and De Havillands or French Spads and Nieuports. Theodore Roosevelt’s son Quentin was shot down while flying a Spad over Chateau-Thierry in July 1918.

The problem of mobilization was complicated. It took Congress six weeks of hot debate merely to decide on conscription. Only in September 1917, nearly six months after the declaration of war, did the first draftees reach the training camps, and it is hard to see how Wilson could have speeded this process appreciably. He wisely supported the professional soldiers, who insisted that he resist the appeals of politicians who wanted to raise volunteer units, even rejecting, at considerable political cost, Theodore Roosevelt’s offer to raise an entire army division.

Wilson was a forceful and inspiring war leader once he grasped what needed to be done. He displayed both determination and unfailing patience in the face of frustration and criticism. Raising an army was only a small part of the job. The Allies had to be supplied with food and munitions, and immense amounts of money had to be collected.

After several false starts, Wilson placed the task in the hands of the War Industries Board (WIB). The board was given almost dictatorial power to allocate scarce materials, standardize production, fix prices, and coordinate American and Allied purchasing. Evaluating the mobilization effort raises interesting historical questions. The antitrust laws were suspended and producers were encouraged, even compelled, to cooperate with one another. Government regulation went far beyond what the New Nationalists had envisaged in 1912.

As for the New Freedom variety of laissez-faire, it had no place in a wartime economy. The nation’s railroads, strained by immensely increased traffic, became progressively less efficient. A monumental tie-up in December and January 1917-1918 finally persuaded Wilson to appoint Secretary of the Treasury William G. McAdoo director-general of the railroads, with power to run the roads as a single system. McAdoo’s Railroad Administration pooled all railroad equipment, centralized purchasing, standardized accounting practices, and raised wages and passenger rates.

Wilson accepted the kind of government-industry agreement developed under Theodore Roosevelt that he had denounced in 1912. Prices were set by the WIB at levels that allowed large profits—U. S. Steel, for example, despite high taxes, cleared over half a billion dollars in two years. It is at least arguable that producers would have turned out just as much even if compelled to charge lower prices.

At the start of the war, army procurement was decentralized and inefficient—as many as eight bureaus were purchasing material in competition with one another. One official bought 1,200 typewriters, stacked them in the basement of a government building, and announced proudly to his superior, “There is going to be the greatest competition for typewriters around here, and I have them all.”

Mobilization required close cooperation between business and the military. However, the army, suspicious of civilian institutions, resisted cooperating with them. Wilson finally compelled the War Department to place officers on WIB committees, laying the foundation for what was later to be known as the “industrial-military complex,” an alliance between business and military leaders.

The history of industrial mobilization was the history of the entire home-front effort in microcosm: Marvels were performed, but the task was so gigantic and unprecedented that a full year passed before an efficient system had been devised, and many unforeseen results occurred.

The problem of mobilizing agricultural resources was solved more quickly, and this was fortunate because in April 1917 the British had on hand only a six-week supply of food Wilson appointed as food administrator Herbert Hoover; Hoover, a mining engineer, had headed the Belgian Relief Commission earlier in the war. Acting under powers granted by the Lever Act of 1917, Hoover set the price of wheat at $2.20 a bushel in order to encourage production. He established a government corporation to purchase the entire American and Cuban sugar crops, which he then doled out to American and British refiners. To avoid rationing he organized a campaign to persuade consumers to conserve food voluntarily. One slogan ran “If U fast U beat U boats”; another, “Serve beans by all means.”

“Wheatless Mondays” and “meatless Tuesdays” were the rule, and although no law compelled their observance, the public responded patriotically. Boy Scouts dug up backyards and vacant lots to plant vegetable gardens; chefs devised new recipes to save on scarce items; restaurants added horsemeat, rabbit, and whale steak to their menus and doled out butter and sugar to customers in minuscule amounts. Mothers pressured their children to “Hooverize” their plates. Chicago residents were so successful in making use of leftovers that the volume of raw garbage in the city declined from 12,862 tons to 8,386 tons per month.

Without subjecting its own citizens to serious inconvenience, the United States increased food exports from 12.3 million tons to 18.6 million tons. Farmers, of course, profited greatly. Their real income went up nearly 30 percent between 1915 and 1918.



 

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