The problem of coördinating the national industries for the supply of the army was complicated by the military decentralization described in the preceding chapter, which President Wilson was not able to remedy before the final months of the war. The army did not form or state its requirements as one body but through five supply bureaus, which acted independently and in competition with each other. Bids for materials from the different bureaus conflicted with each other, with those of the navy, and of the Allies. Not merely was it essential that such demands should be coördinated, but that some central committee should be able to say how large was the total supply of any sort of materials, how soon they could be produced, and to prevent the waste of such materials in unessential production. If the army was decentralized, American industry as a whole was in a state of complete chaos, so far as any central organization was concerned. On the side of business every firm in every line of production was competing in the manufacture of essential and unessential articles, in transportation, and in bidding for and holding the necessary labor. Mr. Wilson set himself the task of evolving order out of this chaos.
The President, as in the purely military problem where he utilized the General Staff as his instrument, prepared to adapt existing machinery, rather than to create a completely new organization. For a time he seems to have believed that his Cabinet might serve the function. But it was ill-adapted to handle the sort of problems that must be solved. It was composed of men chosen largely for political reasons, and despite much public complaint it had not been strengthened after Wilson's reëlection. Franklin K. Lane, the Secretary of the Interior, was generally recognized as a man of excellent business judgment, willing to listen to experts, and capable of coöperating effectively with the economic leaders of the country. His influence with the President, however, seemed to be overshadowed by that of Newton D. Baker and William G. McAdoo, Secretaries of War and of the Treasury, who had inspired the distrust of most business men. McAdoo in particular alienated financial circles because of his apparent suspicion of banking interest, and both, by their appeals to laboring men, laid themselves open to the charge of demagogic tactics. Robert Lansing, the Secretary of State, had won recognition as an expert international lawyer of long experience, but he could not be expected to exercise great influence, inasmuch as the President obviously intended to remain his own foreign secretary. Albert S. Burleson, Postmaster-General, was a politician, expert in the minor tactics of party, whose conduct of the postal and telegraphic systems was destined to bring a storm of protest upon the entire Administration. Thomas W. Gregory, the Attorney-General, had gained entrance into the Cabinet by means of a railroad suit which had roused the ire of the transportation interests. The other members were, at that time, little known or spoken of. Wilson spent much time and effort in defending his Cabinet members from attacks, and yet it was believed that he rarely appealed to them for advice in the formulation of policies. Thus the Cabinet as a whole lacked the very qualities essential to a successful organizing committee: ability to secure the coöperation and respect of the industrial leaders of the country.
Titular functions of an organizing character, nevertheless, had been conferred upon six members of the Cabinet in August, 1916, through the creation of a "Council of National Defense"; they were charged with the "coördination of industries and resources for the national security and welfare." The actual labor of coördination, however, was to be exercised by an advisory commission of seven, which included Howard E. Coffin, in charge of munitions, Daniel Willard, president of the Baltimore and Ohio Railroad, in charge of transportation, Julius Rosenwald, president of the Sears-Roebuck Company, in charge of supplies including clothing, Bernard M. Baruch, a versatile financial trader, in charge of metals, minerals, and raw materials, Samuel Gompers, president of the American Federation of Labor, in charge of labor and the welfare of workers, Hollis Godfrey in charge of engineering and education, and Franklin H. Martin in charge of medicine. The commission at once prepared to lay down its programme, to create sub-committees and technical boards, and to secure the assistance of business leaders, without whose coöperation their task could not be fulfilled.
Following plans developed by the Council of National Defense, experts in every business likely to prove of importance were called upon to coördinate and stimulate war necessities, to control their distribution, to provide for the settlement of disputes between employers and wage-earners, to fix prices, to conserve resources. Scientific and technical experts were directed in their researches. The General Medical Board and the Committee on Engineering and Education were supervised in their mobilization of doctors and surgeons, engineers, physicists and chemists, professors and graduate students in the university laboratories. Everywhere and in all lines experience and brains were sought and utilized. State Councils of Defense were created to oversee the work of smaller units and to establish an effective means of communication between the individual and the national Government. Naturally much over-organization resulted and some waste of time and energy; but the universal spirit of voluntary coöperation evoked by the Councils overbalanced this loss and aided greatly in putting the country on an effective war basis. As Wilson said, "beyond all question the highest and best form of efficiency is the spontaneous coöperation of a free people." In return for their efforts the people received an education in public spirit and civic consciousness such as could have come in no other way.
Of the committees of the Council, that on munitions developed along the most elaborate lines, becoming of such importance that on July 28, 1917, it was reorganized as the War Industries Board. As such it gradually absorbed most of the functions of the Council which were not transferred to other agencies of the Government. During the autumn of 1917 the activities of the Board underwent rapid extension, but it lacked the power to enforce its decisions. As in the case of the General Staff, it was important that it should have authority not merely to plan but also to supervise and execute. Such a development was foreshadowed in the reorganization of the Board in March, 1918, under the chairmanship of Bernard M. Baruch, and when the President received the blanket authority conferred by the Overman Act, he immediately invested the War Industries Board with the centralizing power which seemed so necessary. Henceforth it exercised an increasingly strict control over all the industries of the country.
The purpose of the Board was, generally speaking, to secure for the Government and the Allies the goods essential for making war successfully, and to protect the civil needs of the country. The supply of raw materials to the manufacturer as well as the delivery of finished products was closely regulated by a system of priorities. The power of the Board in its later development was dictatorial, inasmuch as it might discipline any refractory producer or manufacturer by the withdrawal of the assignments he expected. The leaders of each of the more important industries were called into council, in order to determine resources and needs, and the degree of preference to which each industry was entitled. Some were especially favored, in order to stimulate production in a line that was of particular importance or was failing to meet the exigencies of the military situation; shipments to others of a less essential character were deferred. Committees of the Board studied industrial conditions and recommended the price that should be fixed for various commodities; stability was thus artificially secured and profiteering lessened. The Conservation Division worked out and enforced methods of standardizing patterns in order to economize materials and labor. The Steel Division coöperated with the manufacturers for the speeding-up of production; and the Chemical Division, among other duties, stimulated the vitally important supply of potash, dyes, and nitrates. Altogether it has been roughly estimated that the industrial capacity of the country was increased by twenty per cent through the organizing labors and authority of the War Industries Board.
The success of this Board would have been impossible without the building up of an extraordinary esprit de corps among the men who were brought face to face with these difficult problems of industry and commerce. Their chairman relied, of course, upon the coöperation of the leaders of "big business," who now, in the hour of the country's need, sank their prejudice against governmental interference and gave freely of their experience, brains, and administrative power. Men whose incomes were measured in the hundreds of thousands forgot their own business and worked at Washington on a salary of a dollar a year.
The same spirit of coöperation was evoked when it came to the conservation and the production of food. If steel was to win the war, its burden could not be supported without wheat, and for some months in 1917 and 1918 victory seemed to depend largely upon whether the Allies could find enough to eat. Even in normal times Great Britain and France import large quantities of foodstuffs; under war conditions they were necessarily dependent upon foreign grain-producing countries. The surplus grain of the Argentine and Australia was not available because of the length of the voyage and the scarcity of shipping; the Russian wheat supply was cut off by enemy control of the Dardanelles even before it was dissipated by corrupt officials or reckless revolutionaries. The Allies, on the verge of starvation, therefore looked to North America. Yet the stock of cereals when the United States entered the war was at a lower level than it had been for years and the number of food animals had also been reduced.
To meet the crisis President Wilson called upon one of the most interesting and commanding personalities of modern times. Herbert Clark Hoover was a Californian mining engineer, of broad experience in Australia, China, and England, who in 1914 had been given control of Allied Relief abroad. The following year he undertook the difficult and delicate task of organizing food relief for Belgium. He was able to arouse the enthusiastic sympathy of Americans, win financial support on a large scale, procure the much-needed food, and provide for its effective distribution among the suffering Belgians, in spite of the suspicions of the Germans and the hindrances thrown in his path. A master organizer, with keen flair for efficient subordinates, of broad vision never muddied by details, with sound knowledge of business economics, and a gift for dramatic appeal, Hoover was ideally fitted to conduct the greatest experiment in economic organization the world had seen. Unsentimental himself, he knew how to arouse emotion—a necessary quality, since the food problem demanded heavy personal sacrifices which would touch every individual; brusque in manner, he avoided giving the offense which naturally follows any interference with the people's dinner and which would destroy the essential spirit of voluntary coöperation.
Five days after the declaration of war, President Wilson, through the Council of National Defense, named a committee on food supply, with Hoover at its head, and shortly thereafter named him food commissioner. Hoover began his work of educating the people to realize the necessity of economy and extra-production; but he lacked the administrative powers which were essential if his work was to prove effective, and it was not until August that Congress passed the Lever Act which provided for strict control of food under an administrator. This measure encountered strong opposition in the Senate and from the farmers, who feared lest the provisions against hoarding of food would prevent them from holding their products for high prices. Wilson exerted his personal influence vigorously for the bill in the face of congressional opposition, which demanded that large powers of control should be given to a Senate committee of ten, and he was finally successful in his appeal. He thereupon appointed Hoover Food Administrator with practically unlimited powers, legalizing the work already begun on his own initiative.