MOVING THE MILITARY MACHINE
When Congress closed an epochal session on October 6, 1917, it had appropriated over twenty-one billion dollars. Except for $7,000,000,000 loaned to the Allies, and another billion for the normal expenses of the Government, the amount voted was placed at the service of the Administration as America's sinews of war for defeating the Central Powers. No nation had applied such a huge sum to war purposes in a like period.
The loans to the Allies were not considered as part of the American war outlays. The Allies gave their own bonds to the Government as collateral for the loans, bearing the same rate of interest, and a condition attached to the loans was that the money be spent in the United States for war equipment. Hence the loans were allocated for the purchase of material in this country and substantially aided American industries.
Included in the work of Congress was final agreement on a war revenue measure after six months of debate (with wide divergence of taxation plans between the House and Senate) estimated to produce $2,534,870,000, of which $851,000,000 was to be levied on incomes, and $1,000,000,000 on excess profits.
On October 1, 1917, the Government appealed for popular subscriptions to the second Liberty Loan for $3,000,000,000. As in the case of the first Liberty Loan the response at the outset flagged. Two weeks later only 14 per cent. of the maximum total had been subscribed and a daily subscription of $358,000,000 was needed to make the loan a success within the time allotted for receiving subscriptions. A period of apprehension and misgiving followed; but that had happened during the floatation of the first loan, and no European war loan had been asked without a similar experience. It was not an easy task to draw three billion dollars from the public purse, and the purse was leisurely, even lax, in loosening its strings. It needed a nationwide advertising propaganda to open it. The President entered the fray by naming a Liberty Day, fixed for October 24, on which he asked the American people to assemble in their respective communities and pledge to one another and to the Government the fullest measure of financial support.
"The might of the United States," he declared in his proclamation, "is being mobilized and organized to strike a mortal blow at autocracy in defense of outraged American rights and of the cause of liberty. Billions of dollars are required to arm, feed, and clothe the brave men who are going forth to fight our country's battles and to assist the nations with whom we are making common cause against a common foe. To subscribe to the Liberty Loan is to perform a service of patriotism.
"Let the result be so impressive and emphatic that it will echo throughout the empire of our enemy as an index of what America intends to do to bring this war to a victorious conclusion."
The Government's efforts to brace popular interest in the loan, aided by hundreds of thousands of voluntary workers throughout the country who formed Liberty Loan organizations, bankers, boy scouts, girl scouts, the newspapers and magazines, and patriotic, commercial, and fraternal bodies, produced a flood of subscriptions at the last moment which dissipated all fear of failure. The people needed driving, knew that their procrastination called for a dinning advertising campaign to translate intentions into deeds, and finally yielded good-humoredly to the impetus. They responded in such good measure that on October 27, 1917, when the loan closed, $4,617,532,300 had been subscribed, or $1,617,532,300 over the amount asked. The oversubscription exceeded that which the first loan yielded. Approximately 9,400,000 shared in applying for the loan. Of this number, it was estimated, 9,306,000, or 99 per cent., subscribed in amounts ranging from $50 to $50,000, the aggregate of such subscriptions being $2,488,469,350.
The loan proved to be popular in a degree of which the world afforded no equal. Never had there been a loan taken by 9,400,000 subscribers. It surpassed all previous experience of Government loans. The single offering was larger than the total takings in all subscriptions made in the four years of the Civil War. It far exceeded the response to any government loan of the other belligerents.
With an ample treasury to draw from, provided by Congress and the public, the Government proceeded with the war preparations, but in face of inevitable obstacles and friction. The American military establishment was not designed for making War on a huge scale, and, like the British War Office at the beginning of hostilities, was swamped and confused by an avalanche of new responsibilities. There were admitted shortages in clothing, artillery, and machine guns in the cantonments, and delays in the construction of new shipping also produced impatient criticism. Congress interposed by investigations into the general conduct of the war, with the result that the air was cleared and defects of organization located. The investigations appeared to have developed primarily not so much from ineffective and wrong decisions in meeting war needs as from delays due to indecision and procrastination. The result was a change of administrative methods aiming at a centralization of authority, which England and France had early found imperative in conducting the war, instead of depending on a bureaucratic system with its complicated channels of distributed authority. The friction which had arisen seemed to be substantially due to a clash between the methods of business men, whom the administration had requisitioned into war service, and the red tape of an established governmental system. The Administration recognized at length that an infusion into the Government ranks of capable business organizers, bent on conducting their share of the war with expedition, could not blend with departmental systems clogged by traditions, customs, rules, and regulations, written and unwritten. The whole Government became engaged in a process of introspection. The investigations compelled it to see itself as others saw it, and were salutary in that respect alone. In other directions the inquiries revealed, in spite of departmental shortcomings, that an enormous amount of work had been accomplished in a short time. When war was declared the country was wholly unprepared; it was working at full capacity in many war fields to maintain the largest foreign commerce reached in its history. Its industries being thus occupied on the outbreak of war, they could not readily digest a flood of orders, aggregating more than ten billion dollars in value, which the Government suddenly superimposed upon their capacities, with their equipments already driving at top speed under forced draft. On one point at least there was agreement—that the task so far accomplished could not have been done in the same period by any other nation.