In selling directly to the consumer, the War Department adopted the policy of pricing goods at four-fifths of the prevalent retail market prices. Since the cost of living had begun to decline in late 1919 and the early part of 1920, this policy meant a loss to the Government, which had paid war prices for the supplies; but it was not a large loss. On the average, the retail sales brought back nearly 80 per cent of the original cost of the goods sold. The sales expenses came to about 10 per cent of the money received.
The War Department did everything in its power to make the stores attractive to the public. It stocked them with a wide range of articles and advertised them heavily. A press bureau was established in Washington, and the newspapers devoted acres of space to the publicity. In spite of the propaganda, however, the response of the public was not so unrestrained as the outcry against the costs of necessaries might have led one to expect. (To be sure, the Government, naturally, could not set up its stores in the high-rent districts—the districts most convenient to the retail customers.) The army retail stores did business at the rate of approximately $5,000,000 a month—not much for 110,000,000 potential customers. As the sales went on it became evident that, although the protest against high prices was practically universal, only the thrifty minority was willing to step across the line of convenience and custom in order to secure lower ones. The rest preferred to grumble and follow their lines of least resistance.
Yet it is probably true that the retail stores benefited all, since the continued sale of great quantities of surplus military supplies at reduced prices doubtless had an effect in bringing down commercial prices. Although only some 350 items in the Army’s supply list were applicable to retail selling, this range, after all, was considerable. In the subsistence list it ran from Apples, Evaporated, to Vinegar, and in general supplies from Arctics, Cloth Top, to Whips, Artillery. The Surplus Property Division even sold a few motorcycles at the stores.
Far overshadowing the retail sales in quantities of goods moved were the sales to jobbers, dealers, and speculators, by informal bids on advertised lists of supplies. The sales headquarters in Washington and the zone offices became busy markets for months after the armistice as the War Department got rid of the surplus supplies procured by the Director of Purchase. As stated, there were regular commodity days—textiles were sold on Mondays, raw materials on Tuesdays, and so on. At the Monday sales the Surplus Property Division had taken in, by February 20, 1920, nearly $66,000,000 paid for clothing and equipage alone. These sales benefited the general public in that they usually resulted in the goods being sold at retail by salvage companies or by regular mercantile houses at reduced prices.
The fluctuations of markets sometimes made it possible for the Government to sell surplus to bidders at a profit. For instance, a ton or more of camphor, acquired originally for the Medical Department, brought a profit of 84 per cent, due to a post-armistice increase in the price of camphor. Medical supplies generally, although they were sold principally to public institutions, brought a 99-per-cent recovery of their war cost. General supplies—including hardware, kitchen utensils, brushes and brooms, rope, paper, office furniture, musical instruments, and athletic goods—sold at prices which brought back to the Government more than 72 per cent of their war cost.
Apparently useless supplies—useless to civilians, that is—were purchased by bidders who had found unique uses for them. The nonbreakable eyepieces of gas masks were found to manufacture well into motorists’ goggles. The anti-dim paste used to keep the gas-mask eyepieces from fogging from the wearers’ breath had a practical use upon the windshields of automobiles during rainstorms. Trench fans were bought and used as aprons for cannery workers.
Surplus leather was sold in auctions held in Philadelphia, Chicago, San Francisco, Boston, and elsewhere; and the cash recoveries generally were large, ranging from 71 per cent to 100 per cent of the war cost, and even, in instances, returning a profit. Harness did not sell well, because much of it was made of russet leather, which does not attract the commercial buyer, or else because the harnesses were of special designs not used by teamsters.
The demands of other departments of the Government for surplus army motor trucks were so great that only a few were sold as surplus, and those few were neither new nor in good condition. Automobile tires, however, were placed on sale in the retail stores.
The total sale of surplus materials acquired by the Division of Purchase, Storage, and Traffic amounted to $357,000,000 between the date of the armistice and January 31, 1920. The recovery was 77.57 per cent of the original cost.