Mobilizing the industrial econ-
omy for the Great War required
the creation of a new kind of gov-
ernment-business relationship.
Civilian and military organizations
had to adopt new methods of plan-
ning and coordination. The pro-
cess was not pretty and did not go
smoothly. But thanks to the efforts
of hundreds of manufacturers,
an index of industrial production
that stood at 100 in late 1914 rose
steadily to about 140 by early 1917,
then ranged between that level and
about 175 until late 1918. Real GNP
increased by more than 25% during
that four-year period.
After a slow start, American industry
finally geared-up to produce large quanti-
ties of many military items. Sources differ
on the precise numbers; most suggest
quantities of around three million rifles,
200,000 artillery shells, 3,000 airplanes,
1,500 machine guns, 500 artillery pieces,
80 tanks and several hundred thousand
pounds of smokeless powder, other explo-
sives and toxic gas.
The memory and knowledge of the
years of American neutrality and the
shorter period of active military involve-
ment informed and guided both individu-
als and institutions when they were forced
to confront another military conflict some
22 years after the signing of the armistice.
But that is a story for another time.
supposed to take the lead role
in coordinating the needs of the
military with the resources of the
nation’s manufacturers. How-
ever, the members of both were
not appointed until October. The
Council’s five ex-officio mem-
bers (cabinet Secretaries) and the
Committee’s seven presidential
appointees (from industry, labor,
medicine and academia) did not
hold their first meetings until
December. And they only began
A woman working in an American aircraft factory, 1917.
operating in earnest after the
United States severed diplomatic
relations with Germany in Febru-
ary 1917.
successes in cajoling various contractors
It may be too harsh to criticize govern-
to meet the needs of the Army or Navy.
ment officials for establishing the CND/
By the winter of 1917–1918, President Wil-
NDAC as makeshift organizations with no
son, Secretary of War Newton Baker and
clearly defined lines of authority. As noted
presidential advisor and NDAC mem-
earlier, the United States had no experience
ber Bernard Baruch came to realize an
in mobilizing for what had truly become the
important limitation of the Board was its
first “World War.” The CND and NDAC
inability to bridge the fundamental dif-
organized themselves into various com-
ferences in organization and operations
mittees to oversee functions such as trans-
between civilian and military organiza-
portation, communications, munitions and
tions. Washington needed to maintain the
medicine; and its leaders recruited knowl-
ability to use private business to harness
edgeable men to oversee its activities.
the economy for war. But it also saw the
Unfortunately, these committees oper-
need to adapt the military’s procurement
ated very independently; they failed to coor-
system to the one used in the much larger
dinate their activities with each other or
and still very functional private economy.
with the Army’s similarly-uncoordinated
Beginning in March 1918, newly-
and independent bureaus of Quartermaster,
appointed WIB Chairman Baruch revised
Ordnance and Signal, among others. Even
the WIB’s organization and altered many of
while acknowledging these flaws, it’s easy
its practices. The Clearance Office figured
to see that their formation and eventual
out how to coordinate various government
staffing sent a valuable signal that the fed-
agencies’ supply requirements more effec-
eral government was finally ready to take
tively, while the Requirements Committee
seriously the challenge of mobilizing the
provided a more accurate picture of future
economy for war.
demands. The Priorities Division became a
After watching the bureaucratic inertia
source of centralized authority to channel
of the CND/NDAC for only five months,
the flow of manufactured goods to meet the
in July 1917, President Wilson superseded
demands of war. Importantly, it included
those groups and their committees with
representatives from government offices
the War Industries Board (WIB). Unfortu-
for Food, Fuel and Railroad Administra-
nately, his Executive Order saddled it with
tion whose leaders had statutory authority
the same type of difficulties as its predeces-
the WIB did not have.
sor organizations. The WIB had no formal
Military officials achieved a new level of
authority over the action of any civilian or
effectiveness as they reorganized their pro-
military party; it did not include represen-
curement systems to match the capabilities
tatives from important civilian agencies,
of the civilian economy. Thus, by June
such as the US Shipping Board or the
1918, mobilizing the economy to produce
Aircraft P roduction Board; and it operated
the materials needed to prosecute the war
through a bewildering array of dozens of
was finally becoming an efficient and effec-
subcommittees largely headed by business-
tive task. Plans were in place to expand
men seeking to protect their own interests.
production to even higher levels in 1919.
Over time a group of effective lead-
But the signing of the armistice in Novem-
ers enabled the WIB to achieve some
ber made that final surge unnecessary.
Michael A. Martorelli is a Director
Emeritus at Fairmount Partners and a
frequent contributor to Financial His-
tory. He earned his MA in History from
American Military University.
Sources
Brandes, Stuart D. Warhogs: A History of War
Profits in America. The University Press of
Kentucky. 1997.
Farwell, Byron. Over There: The United States
in The Great War, 1917-1918. W.W. Norton
& Company. 1999.
Koistinen, Paul A.C. Mobilizing for Modern
War: The Political Economy of American
Warfare, 1865–1919. University of Kansas
Press. 1997.
Kreidberg, Marvin A. and Merton G. Henry.
History of Military Mobilization in the
United States Army, 1775–1945. Department
of the Army. 1955.
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