WAR FRONT: Twenty-three Years Afterward

Last week, for the second time in history, U. S. business found itself face to face with the imminent necessity for industrial mobilization. The shape of that mobilization, already forming in the mind of Franklin Roosevelt, had still to be revealed; but many a businessman, mindful of the fact history repeats itself (with variations), seemed to see a hurricane sweep through the calendar, discovered himself staring at a faded page on which the date was August 1916.

In that month Woodrow Wilson approved the Act forming a Council of National Defense (six Cabinet officers). Then for eleven months almost as little happened as occurred in England during the eight months after World War II began. In July 1917, after several false starts, the Council set up a War Industries Board.

On Sept. 21, 1917, 65 steel executives, whose prices had soared that summer to 370% of the pre-war level, met with the new War Industries Board in Washington. Before them lay a schedule of lower prices which the Board had worked out. Judge Elbert H. Gary of U. S. Steel addressed Judge Robert S. Lovett of the Board. “May I ask,” asked he, “by what authority the War Industries Board has undertaken to fix these prices?”

There was a moment of pregnant silence. Then said Judge Lovett, “A gentleman of your eminent qualifications in law requires no information from me on that point.” Everybody smiled and got down to the haggling.

Actually, the War Industries Board had no specific legislative authority to fix prices. The vagueness of its powers, in fact, broke the health of its first chairman (Cleveland Lathe Maker Frank Scott) and caused its second (Railroader Daniel Willard) to resign. Not until Woodrow Wilson put Bernard Mannes Baruch in charge and armed him with personal backing did the Board really function effectively. That was in March 1918—eleven months after the U. S. entered the war.

The Baruch board extended its control over most of U. S. industry.* To businessmen, Baruch became the most powerful man in the U. S. Chief means of control was a priorities system, by which it could expedite or delay all shipments of war goods. (Only 25 industries, with total capital of $733,000,000, were classed as non-war.) Meanwhile the price-fixing committee, answerable directly to Wilson, set price limits at the source, on all basic materials. Before the Armistice it was extending its control over retail prices too.

For armaments’ sake, domestic economy was started toward complete rationalization. Baruch later said that if the war had lasted another year “our whole civil population would have gradually emerged in cheap but serviceable uniforms. Types of shoes were to be reduced to two or three. The manufacture of pleasure automobiles was to cease.” As it was, the Board cut the number of steel plow models for sale in the U.S. from 312 to 76, tire sizes from 287 to 9, styles and colors of bathing caps to one per manufacturer, kinds of wooden coffins by 85%.

The Board had teeth. A well-stocked automaker who refused to limit production was told his coal would be commandeered by the Navy; other recalcitrants could not get railroad cars. Yet rarely were the teeth even bared. Working through war service committees in each industry, the Board made a fetish of putting its decisions in the forms of requests, let patriots carry them out voluntarily. Boasted Baruch: “Not one [industry] had to be coerced.” Said Wilson: “The highest and best form of efficiency is the spontaneous cooperation of a free people.” But a different tribute to the Board came from Hindenburg: “. . . A ruthless autocracy was at work. They understood war.”

Most of them were under 50; few were top-flight tycoons. Vice presidents and managers rather than board chairmen in private life, they were picked (mainly by Baruch) from industry’s “coming men.”

After the war, Baruch offered his country three modest recommendations for preparedness: a skeleton defense staff of civilians, a skeleton munitions industry, a subsidy for the home production of imported strategic materials. None of them was followed. Fifteen years later, under onetime Board Member Hugh Johnson, NRA modeled its code authorities on the old war service committees. Such committees and trade associations are far more numerous and better versed in self-regulation than were their prototypes of 1916. But if the Board itself were to take up where it left off, its methods might not be so gentle. To Baruch, 1918 had made the necessity for wage-fixing “very evident.” He was also “led to the thought that, in a similar emergency, there ought to be not alone a mobilization of man power, but of things and of dollars.”

Almost every Armistice Day surviving members of the Board and its staff go to New York for a meal and gabfest with their wartime chief. These men, who did the job once, have long been ready to do it over again, if called. But none of them was called to the War Resources Board (chairman: Ed Stettinius) last fall. Baruch himself has been consulted by the President in the current crisis, but not with any idea of giving him the job. If history repeats itself months may pass before industry, combed for “coming men,” is given authority to get results.

* Except for railroads, fuel, food, shipping and foreign trade, which were administered separately.