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The “Industrial-Military Complex” in Historical Perspective: World War I

Published online by Cambridge University Press:  11 June 2012

Paul A. C. Koistinen
Paul A. C. Koistinen
Affiliation:
Assistant Professor of History, San Fernando Valley State College
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Abstract

Because of a scarcity of economically informed and managerially experienced personnel within the government, a large share of American mobilization during World War I was planned and executed by businessmen in temporary federal service. By focusing on the crucial question of military procurement, Professor Koistinen illuminates the war's legacy for government-business relationships.

Type
Articles
Information
Business History Review , Volume 41 , Issue 4 , Winter 1967 , pp. 378 - 403
Copyright
Copyright © The President and Fellows of Harvard College 1967

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References

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5 Reproduced in U.S. Congress, Senate, Special Committee Investigating the Munitions Industry, Hearings, Munitions Industry, 73rd Cong., 1935, Part 15, 3661 – hereafter cited as Nye Committee, Hearings.

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14 New York Times, Oct. 12, 1916, 10.

15 Reproduced in Nye Committee, Hearings, Part 16, 4056–57.

16 For the best expression of this sentiment see: U.S. Congress, Subcommittee of the House Committee on Appropriations, Hearings, Council of National Defense, 65th Cong., 1st Sess., 1917, 37–38, 42–43 – hereafter cited as Appropriations Subcommittee, Hearings. See also, Beaver, Daniel R., Newton D. Baker and the American War Effort, 1917–1919 (Lincoln, 1966), 51–52, 71–76.Google Scholar

17 Preserving the economic status quo during wartime was a central idea of Coffin and was a basic assumption of the Kernan Board. See the discussion of Baruch below and also: Nye Committee, Minutes of the General Munitions Board From April 4 to August 9, 1917, 74th Cong., 2nd Sess., 1936, Senate Committee Print No. 6, 1, 2, 4, 6, 39; Nye Committee, Final Report of the Chairman of the United States War Industries Board to the President of the United States, February, 1919, 74th Cong., 1st Sess., 1935, Senate Committee Print No. 3, 43–44; Fisher, “Chamber of Commerce,” 435–36.

18 For a complete list of NDAC committees see: U.S. Council of National Defense, First Annual Report (Washington, 1917), 97–127.Google Scholar See also, Nye Committee, Minutes of the Council of National Defense, 11–14, 18–19, 30, and Minutes of the Advisory Commission of the Council of National Defense and Minutes of the Munitions Standard Board, 3, 11, 28, 30–32, 74th Cong., 2nd Sess., 1936, Senate Committee Prints 7 and 8; Appropriations Subcommittee, Hearings, 3–157; Clarkson, Grosvenor B., Industrial America in the World War: The Strategy Behind the Line, 1917–1918 (New York, 1923), 26–29.Google Scholar

19 Testimony of military and other witnesses before congressional committees is the best source for military supply operation immediately before and during World War I. See the relevant portions of: HMAC, Hearings, 1916; SMAC, Hearings, 1916; Graham Committee, Hearings, Serial 1 and 3; Chamberlain Committee, Hearings; U.S. Congress, Senate Subcommittee of the Committee on Military Affairs, Hearings, Reorganization of the Army, 66th Cong., 2nd Sess., 1919; U.S. Congress, House, Committee on Military Affairs, Hearings, Army Reorganization, 66th Cong., 1st Sess., 1919–1920 – hereafter cited as HMAC, Hearings, 1920.

Secondary sources on the Army are legion. None of them treat adequately with supply factors. The better ones include: Dickinson, John, The Building of an Army: A Detailed Account of Legislation, Administration and Opinion in the United States, 1915–1920 (New York, 1922)Google Scholar; Crowell, J. Franklin, Government War Contracts (New York, 1920)Google Scholar; Hammond, Paul Y., Organizing for Defense: The American Military Establishment in the Twentieth Century (Princeton, 1961)CrossRefGoogle Scholar; Huntington, Samuel P., The Soldier and the State: The Theory and Politics of Civil-Military Relations (New York, 1964)Google Scholar; Nelson, Otto L. Jr., National Security and the General Staff (Washington, 1946)Google Scholar; Kreidberg and Henry, Military Mobilization; Risch, Ema, The Quartermaster Corps: Organization, Supply, and Services (Washington, 1953)Google Scholar; Constance Green, McLaughlin, Thomson, Harry C., and Roots, Peter C., The Ordnance Department: Planning Munitions for War (Washington, 1955).Google Scholar

20 Beaver, Baker, 5–7, 51–52, 71–72, 80–81, 108–109, 152, 178, 210–11, 215–17, 243–46; Cramer, C. H., Newton D. Baker: A Biography (New York, 1961), 136–37.Google Scholar

21 Industrial Mobilization Plan, 1933 — contained in U.S. War Policies Commission, Hearings, 72nd Cong., 1st Sess., House Document No. 163, 401–402.

22 Clark, John M., The Cost of the World War to the American People (New Haven, 1931), 30Google Scholar; Crowell, War Contracts, 63. For comparative purposes, the War Department figure would be slightly lower if estimated normal expenses for the war years were subtracted.

23 U.S. War Department, Purchase, Storage, and Traffic Division, General Staff, Supply Bulletin No. 29, Nov. 7, 1918 — reproduced in, Graham Committee, Hearings, Serial 1, 128–32.

24 Cramer, Baker, 122–23; Palmer, Frederick, Newton D. Baker: America at War (2 vols., New York, 1931), I, 372Google Scholar; Beaver, Baker, 71–76; Clarkson, Industrial America, 41–42.

25 Testimony of various members of the NDAC before Congressional Committees is one of the best sources on Commission activities: Chamberlain Committee, Hearings, 1850–1884 — Gifford; Graham Committee, Hearings, Serial 3, 869–79, 987–1019 – Gilford and Frank A. Scott; Graham Committee, Hearings, Serial 1, 333–447, 1793–1857 – Clarkson, Charles Eiseman, and Baruch; Appropriations Subcommittee, Hearings, 3–157. The day to day evolution of the Council of National Defense and its Advisory Commission are traced out in: Council of National Defense Minutes; NDAC Minutes; General Munitions Board Minutes; Nye Committee, Minutes of the War Industries Board from August 1, 1917, to December 19, 1918, 74th Cong., 1st Sess., 1935, Senate Committee Print No. 4; Council of National Defense, First Annual Report, and Second Annual Report (Washington, 1918).Google Scholar

26 Council of National Defense Minutes, 140; NDAC Minutes, 75–78, 80–81; Martin, Digest, 234; Beaver, Baker, 71.

27 Cong. Rec., 65th Cong., 1st Sess., Vol. 55, Part 4, 3335–41, Part 5, 4590–4610, 4651–79, 4814–15, 5001–5049 (intermittent), 5169–89 (intermittent), 5214–25; Cong. Rec., 66th Cong., 2nd Sess., Vol. 59, Part 4, 4089–4091; Council of National Defense Minutes, 129; NDAC Minutes, 80, 82, 85; General Munitions Board Minutes, 131, 142–43, 208–209. For an extended investigation of NDAC committees involving alleged conflict of interest in general and the Committee on Supplies in particular, see: Chamberlain Committee, Hearings, 593–1604 (intermittent), 1791–98. See also, Livermore, Seward W., Politics is Adjourned: Woodrow Wilson and the War Congress, 1916–1918 (Middletown, 1966), 52–57.Google Scholar

28 For the creation of the WIB and its War Service Committees, see: Council of National Defense Minutes, 151–52, 170–71, 196–97, 215–16; WIB Minutes, 31, 38. 50, 69, 78, 93, 111–12, 208, 504–505; Chamberlain Committee, Hearings, 1850–84 — Gifford testimony; Fisher, “Chamber of Commerce,” 335–40, 343–61; Willoughby, William F., Government Organization in War Time and After: A Survey of the Federal Civil Agencies Created for the Prosecution of the War (New York, 1919), 80–91Google Scholar; Baruch, Bernard M., American Industry in the War: A Report of the War Industries Board (March, 1921), ed. by Hippelheuser, Richard H. (New York, 1941), 20–23, 109–116Google Scholar; Clarkson, Industrial America, 240, 300–314; Crowell, Benedict and Wilson, Robert F., The Giant Hand: Our Mobilization and Control of Industry and Natural Resources, 1917–1918 (New Haven, 1921), 24–27, 99–103Google Scholar; Final Report of the WIB, 13–15, 40–41, 50–51.

29 There is no one outstanding comprehensive work on trade associations. Several of the better volumes include: Foth, Joseph H., Trade Associations: Their Service to Industry (New York, 1930)Google Scholar; National Industrial Conference Board, Trade Associations: Their Economic Significance and Legal Status (New York, 1925)Google Scholar; U.S., Department of Commerce, Trade Association Activities (Washington, 1927).Google Scholar

30 The Nation's Business, August, 1918, 9–10.

31 Principal WIB officials, their affiliations, and sources of income, are given in Nye Committee, Hearings, Part 16, 4142–45. Complete lists of WIB personnel and members of the War Service Committees are conveniently available in Clarkson, Industrial America, 501–543.

32 Reagen, Michael D., “Serving Two Masters: Problems in the Employment of Dollar-A-Year and Without Compensation Personnel” (Ph.D. dissertation, Princeton University, 1959), 7–8, 17.Google Scholar

33 Clarkson, Industrial America, 98, 303–311.

34 Beaver, Baker, 71–75.

35 Ibid., 75–78; WIB Minutes, 2, 6, 13–15, 94, 146; Council of National Defense Minutes, 200; Chamberlain Committee, Hearings, 2282–83 — Coffin testimony; War Policies Commission, Hearings, 169–70, 177–78 – Daniel Willard testimony; Palmer, , Baker, I, 378–79Google Scholar; Clarkson, Industrial America, 36–49, 83–84, 202–203; Crowell and Wilson, The Giant Hand, 22–27.

36 See the following secondary sources for the winter crisis and its resolution: Beaver, Baker, 79–109; Noyes, Alexander D., The War Period of American Finance, 1908–1925 (New York, 1926), 244–78Google Scholar; Marshall, L. C., “A Nation of Economic Amateurs,” Readings in the Economics of War, eds. by Clark, J. Maurice, Hamilton, Walton H., and Moulton, Harold G. (Chicago, 1918), 221–24Google Scholar; Clarkson, Industrial America, 42–45, 51–59, 138–39, 199–200, 234–35, 453; Crowell, Benedict and Wilson, Forrest, The Armies of Industry, I. (New Haven, 1921), 4–6Google Scholar; Livermore, Politics is Adjourned, 62–104; Palmer, , Baker, II, 66–84Google Scholar; Paxson, Frederic L., America at War: 1917–1918 (Boston, 1939), 210–228, 250–53.Google Scholar

37 Chamberlain Committee, Hearings, 1885–1924.

38 Cong. Rec., 65th Cong., 2nd Sess., Vol. 56, Part I, 557, 1004, Part 2, 1077–78; U.S. Congress, Senate, Committee on Military Affairs, Director of Munitions, 65th Cong., 2nd Sess., 1918, Senate Report No. 200 to accompany S. 3311, 1–2.

39 Cong. Rec., 65th Cong., 2nd Sess., Vol. 56, Part 1, 977–79, 980–83, Part 2, 1194–1211, 1242–44, 1607–21, 1686–95, 1747, 1819–32, 1842–52, 2095–2105, Part 3, 2136–49, Part 4, 3815, 4504–26, 4572–83, 4945–73, 5013–23, 5551–71, 5739–66, Part 9, 8616.

40 Lloyd, E. M. H., Experiments in State Control at the War Office and the Ministry of Food (London, 1924)Google Scholar; Fairle, John A., British War Administration (New York, 1919)Google Scholar; Renouvin, Pierre, The Forms of War Government in France (New Haven, 1927)Google Scholar; Zagorsky, S. O., State Control of Industry in Russia during the War (New Haven, 1928)Google Scholar; Armeson, Robert B., Total Warfare and Compulsory Labor: A Study of the Military-Industrial Complex in Germany during World War I (The Hague, 1964).CrossRefGoogle Scholar

41 Beaver, Baker, 52, 96 (and footnote 64), 105–106. Revering, yet suspecting, the business community has been a long-run trend in American life. See: Cochran, Thomas C., The American Business System: A Historical Perspective, 1900–1955 (New York, 1962), 2–10, 194–205.Google Scholar

42 Cong. Rec., 65th Cong., 2nd Sess., Vol. 56, Part 1, 558; New York Times, January 5, 1918, 3. See also citations for the Cong. Rec. in footnotes 27 and 39.

43 See the testimony of Willard, Baruch, Gifford, and Coffin, Chamberlain Committee, Hearings, 1799–1847, 1850–84, 2253–89.

44 The Nation's Business, Feb., 1918, 7–9.

45 Clarkson, Industrial America, 5–9, 20, 215–16; Final Report of the WIB, 3–4 – for authorship of the Report see Nye Committee, Hearings, Part 22, 6393–95, 6642.

46 New York Times, Feb. 27, 1918, 4; Fisher, “Chamber of Commerce,” 378–80.

47 Concerning Baruch, the NDAC, and his qualifications for the WIB chairmanship, see: sources cited in footnote No. 18; Baruch, Bernard M., My Own Story (New York, 1957); 308–312Google Scholar; Baruch, Bernard M., Baruch, The Public Years (New York, 1960), 20–25, 28–33, 48–49Google Scholar; Clarkson, Industrial America, 66–73, 89, 301–302; Crowell and Wilson, The Giant Hand, 24–25, 27–31; Palmer, , Baker, II, 201–202Google Scholar; Johnson, Hugh S., The Blue Eagle From Egg to Earth (New York, 1935), 113–14Google Scholar; Coit, Margaret L., Mr. Baruch (Boston, 1957), 147–52, 167–76Google Scholar; Beaver, Baker, 104–108.

48 The WIB Minutes are helpful in tracing the board's development, as are Crowell and Wilson's volumes, The Giant Hand and The Armies of Industry: I. The 52-page introductory essay to the Final Report of the WIB is the one best source on the board. Clarkson, Industrial America and Baruch, American Industry are indispensable despite their very numerous limitations.

49 Graham Committee, Hearings, Serial 1, 518–20 — Geothals testimony; Nelson, National Security and the General Staff, 242–43; Beaver, Baker, 93–97.

50 The quality of March's leadership is a main theme of Coffman, Edward M., The Hilt of the Sword: The Career of Peyton C. March (Madison, 1966)Google Scholar —see especially, 67–68, 76–77, 149, 151, 247–49. See also, March, Peyton C., The Nation at War (New York, 1932), 56.Google Scholar

51 The one best secondary source for analyzing and describing the modernization of the Army's supply structure is, Dickinson, Building of an Army, 284–307. For primary sources and other secondary sources, see citations in footnote 19.

52 Clarkson, Industrial America, 42, 54, 84–85, 128–31; Beaver, Baker, 95, 97.

53 Johnson, Blue Eagle, 90–93; Clarkson, Industrial America, 128–32. Not only did Johnson become an enthusiastic supporter of the WIB, but he was also instrumental in drafting the proposals for restructuring the Army supply system to parallel that of the WIB. See Goethals testimony, Graham Committee, Hearings, Serial 1, 529.

54 WIB Minutes, 427–28; Final Report of the WIB, 14–15; Baruch, American Industry, 111–12.

55 Novick, David, Anshen, Melvin, and Truppner, W. C., Wartime Production Controls (New York, 1949), 28–30Google Scholar; Beaver, Baker, 172–73.

56 Ibid., 156–61, 165–69, 171–79, 186–88; Baruch, Public Years, 56–58; Clarkson, Industrial America, 100–102, 128, 132–135; Johnson, Blue Eagle, 91; Coffman, Hilt of the Sword, 73–74, 76, 84–94, 104–110, 136–41.

57 For the most recent example, see: Beaver, Baker, 76.

58 Businessmen, in and out of government service, before and after the winter crisis of 1917–1918, devoted many hours to War Department supply problems. Before war was declared, the Chamber of Commerce organized advisory boards to facilitate the operations of local quartermasters. The following were among those who aided the Army in setting up the Purchase, Storage, and Traffic Division of the General Staff: Otto H. Kahn, of Kuhn, Loeb & Company, C. D. Norton, president of the First National Bank of New York; R. J. Thorne, president of Montgomery Ward & Company, Inc.; H. H. Lehman of Lehman Brothers; Girard Swope, president of Western Electric Company, Inc.; and F. C. Weems, of J. P. Morgan & Company. See: Fisher, “Chamber of Commerce,” 331–34; HMAC, Hearings, 1920, 447; Graham Committee, Hearings, Serial 1, 293; Dickinson, Building of an Army, 305–306.