Through a combination of executive orders and new laws passed swiftly by Congress, Wilson soon had all the power and organizational machinery he thought he would need to help the Allies win the war. The laws covered the raising of an army, war finance, espionage, control of the nation’s food and energy supplies, and restrictions on exports. A day after the declaration of war, Wilson issued Executive Order 2587A, authorizing the heads of federal agencies to fire a civil servant when there were grounds for believing that his continued employment “would be inimical to the public welfare by reason of his conduct, sympathies, or utterances, or because of other reasons growing out of the war.” No explanation was required, and the order was kept secret. It is not known how many civil servants were dismissed, but 868 applicants were denied the opportunity to take civil service exams because of questions about their loyalty. Other executive orders put the government in control of areas Wilson deemed crucial to the success of the war, from labor to censorship and propaganda to telegraph and railway lines.
In 1925, looking back on the U.S. contributions to victory, Franklin D. Roosevelt credited the Wilson administration rather than the patriotism and hard work of the American people. “If Wilson and his cabinet ever get historical praise for anything it should be for the very remarkable leadership and direction of public opinion which resulted in the grand effort,” he wrote. “It was carefully thought out, the right men . . . were called in, and, in other words, the American organization for war was created from the top down, NOT from the bottom up. This is most important.” Nearly all of the right men were Democrats and acolytes of Woodrow Wilson. They admired his idealism, shared his devotion to the public interest, and dared to hope—as he hoped—that the United States would lead the world to a lasting peace.
As commander in chief, Wilson was ultimately responsible for 4.8 million men in uniform, the largest armed force the United States had ever assembled. But he spent little time with generals or admirals. He did his fighting with the aid of a small band of civilians in Washington, some from his cabinet, the rest appointed for the duration of the war. All were given enormous power, and most had sense enough not to flaunt it. Edicts were few. Officials relied instead on publicity campaigns exhorting citizens to cooperate with government in the interest of winning the war and showing the world that choice, the essence of democracy, was more potent than force.
Even the draft, which is first and last a form of governmental coercion, was given an air of voluntarism. It was brought into being by a new law, the Selective Service Act, which allowed local draft boards composed of civilians to decide whether a man would render more service as a soldier or as a worker in a war-related job. And that, Wilson told the country, was “a new thing and a landmark in our progress. . . . It is in no sense a conscription of the unwilling. It is, rather, selection from a nation which has volunteered in mass.”
In the weeks leading up to the declaration of war, Wilson and Baker had envisioned calling for volunteers first and then instituting a draft. But a few days before his war speech to Congress, Wilson scrapped the call for volunteers. He and Baker would maintain that the change was made for practical reasons: conscription would yield more predictable results than a call for volunteers, and once registration was complete, the system would be as manageable as a spigot—turned on when troops were needed and adjusted up or down as casualties or battle plans demanded. England had learned the hard way (and the United States had absorbed the lesson) that when skilled workers volunteered for the battlefield, factory production often suffered.
The Senate needed only two weeks to pass the administration’s bill, but the debate in the House dragged on for weeks. Wilson stood fast, refusing all requests for compromise. In a tirade that lasted for more than an hour, the Speaker of the House, Champ Clark, said that he prayed that his son, who had just enlisted, would fight shoulder to shoulder with other volunteers, “not by the side of the slackers and loafers.” Some congressmen insisted that conscription had no place in a democracy. Others predicted that the riots sure to follow the passage of a draft law would give heart to the enemy.
The most vehement opposition came from the Southern bloc. Ordinarily, Hubert Dent of Alabama, chairman of the House Committee on Military Affairs, would have been the bill’s sponsor, but Dent refused to serve. His fellow Alabamian George Huddleston took to the floor to warn against sinister forces plotting to militarize the United States. Although none of the Southerners dared to give a speech stating the region’s real objection to the draft, a few confided it to the army’s chief of staff, who shared it with a friend: “they do not like the idea of looking forward five or six years by which time their entire male Negro population will have been trained to arms.”
The bill’s passage in the House was also delayed by Theodore Roosevelt, who was determined to raise a volunteer force and take it to France despite the fact that Secretary Baker had already rejected the idea. Weeks of jockeying by Roosevelt’s friends led Congress to amend the Selective Service Act, empowering Wilson to raise such a force if he wanted one. He did not.
Roosevelt would insist that Wilson had excluded him for political reasons, and Wilson would pretend that he had not. While politics was not the only factor in the president’s decision, Wilson rarely made a move without considering its likely effects on the Democratic Party, and he and other Democrats feared that Roosevelt would parlay his service on the Western Front into another presidential nomination.
The draft began on June 5, when men between the ages of twenty-one and thirty were to present themselves at their local polling places to register with their draft boards. Baker, fearing a reprise of the violent resistance to the military officers in charge of the Civil War draft, wanted civilians and local government front and center in raising the millions of American soldiers needed for the war. He also wanted the whole country to treat Registration Day as a patriotic occasion, and with that in mind he called on governors and mayors to organize festivities and urge young men to heed the call. Not that they had a choice. Failure to register was punishable by as much as a year in prison.
The Department of Justice deputized thousands of temporary marshals to stand guard at polling places, but Registration Day proved uneventful. The country’s major newspapers reported only four arrests and four antidraft demonstrations. Nearly everywhere the turnout was greater than expected. The state-by-state tallies were awaited as eagerly as presidential election returns, and the final count, 10,264,896, was hailed as the first American victory of the world war.
White planters in the South had opposed the conscription of African Americans on the ground that it would leave them shorthanded in the fields, but the army insisted that its needs took precedence. The first two calls to register for the draft drew a total of 2,290,527 African Americans. But black soldiers quickly learned that answering the call to duty did not guarantee equal treatment in the army. Draft board officials were told to tear off the bottom left-hand corner of any registration form filled out by a black applicant, a step taken with the idea of creating a segregated army. On the day the Selective Service Act was signed, the secretary of war informed the president that the army had plans for a separate training camp, at Fort Dubuque, Iowa, for black soldiers. Secretary Baker went on to say that Howard University, the Hampton Institute, and the Tuskegee Institute were cooperating with the War Department in establishing the camp. Many African Americans hoped that by rising to the defense of their country in wartime, they would inspire the government to eliminate the obstacles to racial equality once peace was restored.
In all, there were three Registration Days, bringing the rolls to 23,900,000 men. Of the 6,400,000 selected for military service, the army took 2,700,000. Another 1,500,000 enlisted, bringing the total number of soldiers in the U.S. Army during the war to 4,200,000, half of whom served in France.
• • •
The job of carrying the troops across the Atlantic fell to Secretary Josephus Daniels of the navy, and as the United States entered the war, President Wilson might have been the only one in Washington who believed that Daniels would rise to the challenge. Daniels had been under attack for years—rebuked by Republicans for his pacifism and his initial resistance to the defense buildup, reviled by big business for opening government-run factories to make the navy’s gunpowder and armor plate, and resented for banning alcohol from the captain’s table and for enabling enlisted men to acquire the knowledge necessary for an officer’s commission. Colonel House, fearing that the attacks might cost Wilson the election of 1916, had urged him to fire Daniels. When Wilson refused, one of the publicity men at his campaign headquarters was put to work writing Wilson and the Issues, a book-length hosanna to the president. The author, George Creel, later confessed that nine of the book’s ten chapters were padding for the one aimed at raising the stock of Josephus Daniels.
Daniels counted himself a champion of the common man, by which he meant the common white man. Willingly, even eagerly, he forced the U.S. Navy to abandon its elitism but showed no interest in ending its virtual exclusion of blacks, who were rarely allowed to serve anywhere but the galley.
To the ambitious young men who worked for him in Washington, Daniels seemed less a modernizer than an old-time Southerner. Day in, day out, he wore a bow tie, shirt with a soft collar, and broad-brimmed hat. His suits were white in summer, black in winter. On foot, in conversation, and in making up his mind, he seemed allergic to speed. Although cordial, he said little, a trait so rare in official circles that it raised questions about his brainpower. But he listened attentively and was a close student of reports prepared by his staff. Subordinates who complained of his procrastination learned that he often waited as a hunter waits, on the alert for the first good moment to bag a senator essential to the success of his next endeavor. Wilson had confidence in the secretary’s judgment and no doubt appreciated his loyalty, which was absolute.
The pacifism of Josephus Daniels brought no end of criticism, and the critics seemed not to notice that he set it aside whenever Wilson ordered a military intervention. At Veracruz in 1914, in Haiti in 1915, and in the Dominican Republic in 1916, the navy and the marines (not yet a separate branch of the armed services) had been in the vanguard. The Punitive Expedition had been an army affair, but naval flotillas patrolled Mexico’s east and west coasts. Daniels had backed these operations to the full in the belief that unless the United States kept order in the region, it would be vulnerable to the depredations of one imperial power or another. But on March 20, 1917, when Wilson asked each cabinet member to say whether he thought the United States should or should not enter the war, Daniels had been the last to speak and the only one who seemed reluctant to say yes.
Despite his aversion to armed conflict, Daniels had closely followed the world war at sea from the beginning. In the spring of 1917, with their armies still deadlocked on the Western Front, the duel between the British blockade of the North Sea and the U-boat campaign in the waters off Britain appeared to hold the key to final victory. When the United States entered the war, the U-boats were sinking the merchant ships sailing to and from Britain twice as fast as they could be replaced. The Germans were betting that their submarines could win the war before the U.S. Army showed up in force on the Western Front, and Daniels was determined to prove them wrong. At the urging of the British, he suspended a program to build large battle cruisers and focused instead on turning out scores of destroyers and sub-chasers capable of thwarting the U-boats.
No wartime accomplishment of the U.S. Navy pleased Daniels more than the transport of two million American soldiers to France without the loss of a single ship. Convoyed by destroyers as soon as they reached waters menaced by U-boats, the troopships traveled in packs and kept up a zigzag course, making it virtually impossible for a submarine to put itself in position and carry out the preparations needed for a good shot. Merchant ships were also convoyed, keeping losses to one-half of one percent.
• • •
Wilson put a globetrotting American engineer named Herbert Hoover in charge of the food supply. Born on an Iowa farm in 1874, Hoover had been orphaned at nine and handed from relative to relative until he finished high school. With the help of a tutor, he managed to get into a new college that charged no tuition, Leland Stanford Junior University in California. To support himself he worked in an office on campus and started a laundry service for students. He graduated in 1895 with a major in geology. After working briefly as a mining engineer in California, he went to Australia as an employee of a British mining concern. The company gave him a raft of assignments in Asia, and in 1902 he decided to settle in London and hire himself out as a mining consultant. In his quiet hours he wrote a textbook that became a perennial bestseller, Principles of Mining. He was a canny investor as well. By the time he turned forty, in 1914, he was a millionaire many times over.
Hoover spent the first weeks of the world war as a volunteer at the U.S. embassy in London, helping thousands of stranded American tourists find a way home. He also helped to start a private relief effort to save Belgium from starvation. He donated huge sums to the cause, raised millions more, and as chairman of the organization was soon purchasing $5 million worth of food and medicine each month and managing a fleet of three dozen relief ships. Ambassador Page, an early admirer, wrote Wilson that Hoover was “a simple, modest, energetic man who began his career in California and will end it in Heaven.”
As soon as the United States declared war, Hoover sailed home. On May 3 he had an audience in New York with Colonel House, and House wrote Wilson to recommend that Hoover, not Secretary Houston of the Department of Agriculture, be entrusted with the challenge of keeping Americans well fed while increasing food exports to Europe. Hoover had one condition: he wanted absolute authority. House advised Wilson to grant it, explaining that Hoover was “the kind of man that has to have complete control in order to do the thing well.”
The president took the colonel’s advice and also submitted a bill asking Congress for the power to control two vital commodities, food and fuel, during the war. When it became apparent that the bill would not be passed without a long fight, Wilson moved ahead without Congress. He put Hoover to work as food administrator and trusted that the Food Administration would follow. Hoover would not be a dictator, Wilson promised. His enormous powers would be exercised only where “some small and selfish minority proves unwilling to put the nation’s interests above personal advantage.”
Skeptics wondered why the food supply needed any controls at all. American farmers had been feeding their fellow citizens and rounding out the supplies of the Allies and neutrals since the outbreak of the war. But after a lean wheat harvest in 1916, silos were nearly empty, and food prices were headed for the stratosphere. In February 1917, mothers who could not feed their families had taken to the streets in New York and several other cities to protest. Grain reserves in Europe were also dangerously low.
Hoover had three ideas for keeping hunger at bay. The first was to set the price of wheat, the most critical foodstuff, at a point high enough to spur farmers to plant fencepost to fencepost. He also proposed to monopolize the wheat trade through a government-owned grain corporation. With total control of the market, Hoover said, he could prevent hoarding and speculation and end the frenzied international bidding that had driven up the price. Radical as these measures were, they paled beside his third idea. Rather than impose rationing, he wanted to persuade Americans to change their eating habits. He was convinced that if they would voluntarily substitute other grains for wheat and trade their beef and pork for fish and fowl, no one in the United States would go hungry and he could fill the Allies’ orders as well.
With Wilson’s approval, Hoover reached into every kitchen of the country. Housewives and restaurateurs were asked to become members of the Food Administration and sign a pledge to follow its directives as far as their circumstances allowed. Edith Wilson signed on and, like millions of housewives across the country, complied with Hoover’s request to display her membership placard in a front window.
The most remarkable aspect of the idea to ask Americans to change their menus was that it had occurred to Herbert Hoover, a man so unrelievedly pessimistic that Wilson soon came to dread their meetings. Yet Hoover was also confident that he could beguile his fellow Americans into Meatless Mondays and Wheatless Wednesdays, heaping their plates with vegetables, and trying peculiar new foods called “peanut butter” and “cottage cheese.”
Hoover succeeded by delegating the charm offensive to a handful of the advertising and public relations men who volunteered in Washington during the war. Taking every opportunity to lionize Hoover so that the public would do as he asked, they peddled the story of the rags-to-riches orphan who became “the almoner of starving Belgium.” By the war’s end, it would have been hard to find a newspaper reader who did not know that Hoover and his chief aides were serving the government without pay. The publicists supplied an endless stream of statistics illustrating his point that small sacrifices added up, and they persuaded magazines and newspapers to publish recipes (sometimes whole cookbooks) for new dishes. Americans grumbled about having to “Hooverize” their dining, but they did it. Seven of ten households took the Food Administration’s pledge.
A nerd and a technocrat before those words entered the language, Herbert Hoover focused intently on whatever had his attention—so intently that he was once observed chewing his way through an entire cigar without thinking to light it. To figure out how to feed the United States, the Allies, and the neutrals, he pored over the Department of Agriculture’s statistics, discovered that wheat was the crux of the problem and made wheat the crux of the solution. He let the American people think of themselves as the heroes of his story, and perhaps they were. They made their sacrifices voluntarily, every day for more than a year. Herbert Hoover’s Food Administration was one of the home front’s greatest successes.
• • •
The winter of 1917–1918 was one of the coldest in decades, and by Christmas, the newspapers were full of stories of babies freezing to death in their cribs, frostbitten soldiers in training camps, and shivering city dwellers forced out of their apartment houses and into neighborhood missions and police stations—all for want of coal. There was plenty of coal coming out of the mines, but the carrying capacity of the railroads had been strained to the limit by the demands of the army and navy.
On December 26, Wilson took control of the railroads. For the rest of the war, they would be run by the brand new Railroad Administration, the management of which he added to McAdoo’s responsibilities at the Treasury. After weeks of discussion, the two had concluded that the temporary consolidation of hundreds of competing railways into a common national service was the only way to end the chaos, and neither of them could think of an entity other than the federal government capable of running the operation impartially. To the astonishment of many, the railroads did not protest. “On the contrary,” McAdoo wrote, “their attitude was distinctly one of relief. . . . They were, speaking frankly, at their wits’ end.”
The blizzards and subzero temperatures continued, and the coal crisis worsened until January 14, when McAdoo set shipping priorities for the railroads: coal for consumers and public utilities first, food second, and transatlantic ships third. A few days later, the federal government ordered a weeklong shutdown of all factories east of the Mississippi to be followed by ten weeks of five workdays instead of the customary six. Wilson hesitated, fearing that if the plan failed, the coal crisis would be worse than ever. He consented only because no one could think of another solution. In the end, the gamble worked. The railroads were untangled, and the nation’s furnaces were fired in an orderly fashion. But the success came at a steep price: billions in lost wages, billions more in lost production.
The Senate’s inquiry into the coal fiasco was one of five congressional investigations of the administration’s war effort under way as 1918 began. After giving Wilson all the power he had sought in the first months of the war, after voting unprecedented sums for the mobilization, and after waiting for progress that always seemed to be just around the corner, Congress had run out of patience. The most wide-ranging investigation, by the Senate Committee on Military Affairs, had exposed confusion, delays, mistakes, and shortages of practically every necessity of war, from boots and uniforms to arms and ammunition. While the army’s procurement officers debated the relative merits of this weapon and that, soldiers were training with wooden rifles and hauling log cannons around their artillery ranges. “Broomstick preparedness,” Theodore Roosevelt called it in one of a series of newspaper columns on the chaos in the War Department. Worst of all, waves of disease were sweeping through the training camps. Housed in unheated barracks or damp tents, recruits were vulnerable to meningitis, diphtheria, scarlet fever, and more.
On January 10, after a month of listening to scores of witnesses, the Senate Committee on Military Affairs, chaired by George E. Chamberlain, an Oregon Democrat, summoned Secretary Baker to testify. The questions were brusque, and throughout the three-day interrogation, it was clear that committee members were less interested in explanations than in forcing his resignation. Baker got no credit for all that had gone right: a massive buildup in the rank and file from 200,000 to 1,400,000 men, the commissioning and training of 100,000 new officers, and the construction of sixteen large training camps where hundreds of thousands of recruits had been readied for France. He owned the mistakes but pointed out that many had been corrected. Asked about sickness among the troops, he noted that the death rate had been three times higher in the camps where the army trained soldiers for the Spanish-American War.
Above all, Chamberlain wanted to solve the problems uncovered by his investigation, and he proposed to do it by shifting the management of the war from the president and his secretaries of war and navy to a director of munitions and a three-man war cabinet composed of distinguished outsiders. He and Wilson discussed the idea after Baker’s first day of testimony, and the senator could not have been surprised to find the president adamantly opposed. The creation of a war cabinet would tell the country, in the plainest possible terms, that Woodrow Wilson had failed as a war president. Wilson tried to dissuade Chamberlain, but his arguments were vague, and by January 18, Chamberlain had moved his bill through his committee. A day later, at a luncheon in New York, he told a large audience filled with Republicans that “The military establishment of America has fallen down; there is no use to be optimistic about a thing that does not exist; it almost stopped functioning. Why? Because of inefficiency in every department of the Government of the United States.”
Wilson sent Chamberlain a frosty note to ask whether he had been correctly quoted. Chamberlain confirmed the quotation but asked Wilson to consider it in the context of his whole speech, which made the point that the current problems were the consequence of a long history of American neglect of military affairs. “All present understood the criticism,” Chamberlain wrote, “and you will note that ex-President Roosevelt in his speech shortly following mine made substantially the same criticism of conditions during the Spanish-American War.” Chamberlain closed with an offer to meet at any time to review the testimony given at his committee hearings.
Wilson did not want another meeting. He wanted to kill the war cabinet idea, and he struck his first blow in a statement denouncing Chamberlain’s speech as “an astonishing and absolutely unjustifiable distortion of the truth” and praising Baker as one of the ablest public officials he had ever known. (Baker had privately offered to resign after Chamberlain’s speech, but Wilson would not hear of it.) The president also summoned his Senate stalwarts and asked them to throw their all into the fight against Chamberlain. Although willing, they were pessimistic about the president’s chances.
Senator William J. Stone of Missouri, chairman of the Committee on Foreign Relations, tried to help with a long-winded speech accusing congressional Republicans of playing politics with the war and of hoodwinking Chamberlain into doing their dirty work. Lodge reminded Stone that the Republicans had strongly supported the president’s war measures.
Chamberlain defended himself against the president’s accusations and suggested that Wilson was underinformed. For three hours he illustrated his point by reading from testimony from his committee hearings. The president, meanwhile, was spending the day in his bedroom, felled by a bad cold. The pattern—political crisis, physical illness, seclusion—was familiar.
Chamberlain now had the upper hand, but Wilson was determined not to go down in history as the president who had led his country into a war only to fail as commander in chief. After sizing up the fight, he concluded that Baker would have to redeem himself and that the White House could trump Chamberlain only by proposing its own bill and persuading a hostile Congress to pass it. A few days later, speaking from an outline scrawled on a single sheet of paper, Baker testified again, holding forth for more than four hours. At one point Chamberlain asked the secretary why his earlier testimony had been so much less candid. Baker explained that he had not wanted to give Germany any information it did not already have, and for that reason, he said, he would not disclose how many American troops were in France. But he did reveal that 500,000 more were ready to go whenever there were ships to take them.
While frank about the War Department’s errors and false starts, Baker also reminded the committee that the challenges of the war were unprecedented in kind and scope. He had consulted the experts, he said, but they often disagreed. And once in France, the United States faced immense obstacles. The building of barracks, for example, began not with deliveries of wood to a construction site but with the felling of trees and the milling of lumber.
Wilson made his legislative move a week later, asking Senator Lee S. Overman, a North Carolina Democrat who chaired the Judiciary Committee, for the power to reorganize the executive branch and reallocate money as he saw fit. When Overman introduced the bill, the Senate flew into a rage. More than a few of its members said that if they were to give the president such power, they might as well abdicate.
Overman’s fight to move the bill through his committee lasted six weeks and was so bitter that he thought he should wait a bit before taking it to the Senate floor. It needed to “soak,” he explained to Wilson. “Let the senators consider it and talk about it in the cloakroom, and I think we will stand a better chance.” Once on the floor, the bill set off a debate that dragged on for another three weeks, with one side swearing that the bill would give the president more power than the kaiser and the other swearing that the bill’s defeat would help the kaiser by keeping the president in shackles.
The impasse ended on April 24, when Chamberlain announced that he would drop his own bill and support the president’s. He urged his colleagues to join him, and by then even the Republicans were inclined to let Wilson have his way. With one man in charge of the war effort and free to carry out the task as he saw fit, there would be no plausible alibis for inaction and no one else to blame for mistakes. The Overman Act, passed by wide margins in both houses, enabled the president to reorganize any agency of the executive branch, fire and transfer officials, and move funds from one agency to another as long as they were used for the purpose originally specified by Congress. The new powers were vast but temporary—set to expire six months after the war’s end.
• • •
Chamberlain had convened his hearings in December 1917, Overman’s advocacy of the president’s bill began in February, and it took until May 1918 to put the new law on the books. As Wilson waited for it, he appointed Bernard M. Baruch as chairman of the War Industries Board, which had been created to coordinate the government’s purchases of all the goods and commodities needed for the war. The appointment was a bold move on several counts. Baruch was a Wall Street speculator with no administrative experience, the business establishment loathed government interference in private enterprise, and Baruch would have more power to interfere than any federal official had ever had.
Wilson took the risk because he believed that the War Industries Board needed an autocrat and that Baruch would make a good one. He had been watching Baruch closely and relying on his advice for more than a year. Baruch had moved to Washington early in 1917, at Wilson’s request, to serve on the advisory commission of a lethargic body known as the Council of National Defense. Frustrated by the dithering, Baruch moved ahead on his own. Responsible for the purchase of minerals and raw materials, an area he knew well from his investing, he contacted the two most powerful copper barons of the United States and talked them into selling their ore to the government for less than half the market price. He rested his case on two points. The first was that they were going to make millions anyway, because of massive government spending. The second was that business ought to cooperate in order to show the world that American soldiers were not being asked to fight a war for the rich. The two copper men quickly granted Baruch’s request. Other copper companies had no choice but to follow suit. Baruch publicly praised the industry for coming around without a fight.
Wilson unchained the War Industries Board from the Council of National Defense and gave Baruch carte blanche to “guide and assist” the armed forces in allocating contracts, taking control of strategic materials, and accelerating production and delivery schedules. Once Baruch told an industrialist or a general what to do, his dictum could not be appealed except to the president, who nearly always sided with his own men.
Baruch took over the War Industries Board only eight months before the war ended, but he and his lieutenants managed to minimize delays, create order, and conserve untold tons of raw materials. Under Baruch’s leadership, munitions and other matériel soon began rolling smoothly off the assembly lines. But it would have taken a miracle to transport all of it to France; the United States never came close to building or borrowing the number of ships needed to fully equip Pershing’s army. American soldiers did much of their fighting with arms purchased from the British and the French. The Allies could not keep pace with the demand as the United States scaled up its forces in France. In the words of one judicious historian of the American war effort, “Only the armistice saved the day.”
• • •
In May 1918, weary of congressional investigations, Wilson asked Charles Evans Hughes to conduct an independent inquiry into the most expensive disaster of the war effort, a billion-dollar aircraft program that had yet to send a single plane to France. Hughes, who had returned to the practice of law after losing the presidential election of 1916, suspected that Wilson had turned to him in order to counter the charge that the White House was running a partisan war, and that was undoubtedly true. But Hughes was also the right man for the probe. As a Republican, he would have no motive to whitewash his findings, he was as rectitudinous as Wilson, and he had risen to national prominence as an investigator of financial scandals. With a team from the Department of Justice, Hughes soon amassed mountains of data and testimony from nearly three hundred witnesses. Their findings, which ran to seventeen thousand pages, boiled down to a simple conclusion: the aviation industry was guilty not of fraud but of colossal ineptitude. The news was disheartening, but it removed the taint of scandal.
William Howard Taft was also drafted in the spring of 1918, for service on the National War Labor Board, a court of last resort for labor disputes. Abandoning his usual practice of putting one man in charge of a new agency, Wilson appointed two, a Democrat and a Republican. The Democrat was Frank P. Walsh, a genial lawyer of liberal persuasions and an old hand at industrial relations. The Republican spot went to Taft, the man Wilson had turned out of the White House in 1912. By all accounts, Taft fully embraced his new role and after a tour of Southern textile mills, he showed labor more sympathy than he had ever done in the past. He ordered the mill owners to double, in some cases triple, their wages. His conservative Republican friends could scarcely believe it when he championed the eight-hour day, the right to unionize, collective bargaining, equal pay for women, and a living wage. No one was more surprised than Taft. All he could think to say about his change of heart was that he had come into “curiously agreeable relations” with the labor representatives on the board.
• • •
Quickest and most energetic of the president’s men was his son-in-law, William Gibbs McAdoo, who had begun preparing the Treasury for war months before Wilson made up his mind to fight. As a first step McAdoo reread his books on the financing of the Civil War, hoping to find advice and inspiration. Recalling the exercise years later, he wrote, “I did not get much . . . except a pretty clear idea of what not to do.” Lincoln’s treasury secretary, Salmon P. Chase, had relied on a hodgepodge of expedients born of desperation and had neglected to tap the North’s patriotic fervor. “This was a fundamental error,” McAdoo thought. “Any great war must necessarily be a popular movement. It is a kind of crusade; and, like all crusades, it sweeps along on a powerful stream of romanticism.”
McAdoo tried to estimate the war’s cost in advance, but there was no telling how long the war would last, and each new set of financial projections from the army and navy was higher than the last. Ideally, expenses would be met as they were incurred, with tax increases, but it soon became clear that taxes alone would not suffice. The government would also have to borrow, and it fell to McAdoo to find the golden mean. He settled on one-third taxes, two-thirds loans.
By the time Congress declared war, McAdoo had drawn up a bill calling for the largest issue of government securities in the history of the world, a $7 billion package of bonds and short-term notes. He understood that the huge numbers would stagger the congressional imagination but believed that the public interest would be better served by divulging the stupendousness of the undertaking sooner rather than later. McAdoo had a well-deserved reputation for cussing, and when he told the House Ways and Means Committee that the United States would have to lend billions to the Allies in addition to funding its own war, the committee’s chairman was floored by the amount of profanity it took to make the simple point that strengthening the Allies would save American lives. But McAdoo received the authority he needed without delay.
That hurdle crossed, McAdoo immediately faced another: the Treasury had never gone to the investing public with a bond offering of even $1 billion. He rejected the obvious alternative, a series of smaller offerings, because he knew that before the ink dried on one set of bonds, he would have to issue another. And another. Also, he wanted to send a big, bold message to Berlin and thought that a war financed in “driblets” would make the United States look weak. In the circumstances, $1 billion seemed like a driblet, but if he aimed too high, the offering might fail for lack of investors. And that, he thought, would be as demoralizing as a major military defeat. After consulting some of the country’s best financiers, he settled on $2 billion—an informed guess but still a guess.
McAdoo faced a similar challenge in setting the interest rate on the bonds. Priced too high, they would inflate the cost of the war; priced too low, they might go unsold. Both he and Wilson regarded the war as a people’s war, a war for democracy, and McAdoo wanted ordinary citizens, not just the rich, to buy the bonds. His idea, he wrote, was to build “a financial front which would rest on the same inspiration as the military front of the army. . . . A man who could not serve in the trenches in France might nevertheless serve in the financial trenches at home.” McAdoo fixed the price at 3-1/2 percent at a time when bonds returned an average of 4 percent. He sweetened the offer by exempting the bonds from income tax and promising that if future issues carried a higher interest rate, bondholders could convert the old ones into the new.
Finally, McAdoo had to figure out how to sell his bonds to a public that did not know a bond from a stock and regarded both with suspicion. For this end of the work, William Gibbs McAdoo was superbly equipped. He was a showman by nature and a salesman by experience, having raised huge sums to build the first railway tunnels under the Hudson River. He was good-humored and tenacious, and at six feet, six inches tall had no trouble commanding an audience. He liked people, and people generally liked him. The notable exception was his father-in-law, who benefited immensely from McAdoo’s exuberance and tenacity but clearly disliked competing for attention at family gatherings.
Before taking his new product to market, McAdoo gave it a catchy name: the Liberty Loan. Newspapers, brochures, and advertisements explained that when a family bought a piece of the Liberty Loan in the form of a Liberty bond, it was lending money to the U.S. government, not speculating on Wall Street. The bonds were safe, they earned a solid return, and if a bondholder needed his money before the bond matured, he could cash it at the corner bank or the nearest post office. To attract the masses, the Treasury sold the bonds in denominations as small as $50 and allowed purchases on the installment plan.
Launched on May 2, the Liberty Loan appeared to be an instant success. Orders flowed into the Treasury at the rate of $1 million an hour on May 3 and swelled to $20 million an hour on May 4. Three days in, when the Treasury announced that $300 million of the bond issue had been sold, the press rejoiced and speculated that it would be fully subscribed well before the offering closed, on June 15. McAdoo was not ready to celebrate. Nearly all of the early buyers were big financial institutions, corporations, and wealthy individuals, and he worried that the positive reports in the newspapers would lead ordinary Americans to think that the job was done. He asked Wilson to issue a proclamation urging all citizens to subscribe, and Wilson responded with a $10,000 subscription and a short note that he allowed McAdoo to share with reporters.
Overnight the Treasury began a marketing campaign on a scale never before attempted by the federal government. After the war, when McAdoo boasted that the Treasury had reached nearly every home in the country, he was not exaggerating. He used all the techniques known to the advertising men of the day, from parades and rallies to posters and pamphlets. Post offices began canceling stamps with a message exhorting citizens to buy Liberty bonds, ads for the bonds appeared on mail trucks, and every postman sported a small ad in his hat band. McAdoo created a National Women’s Liberty Loan Committee headed by his wife. Women’s clubs across the country acted as sales agents. The Boy Scouts of America, 300,000 strong, made a house-to-house canvass on behalf of the bonds. Department stores sold the bonds to employees and shoppers alike, and factories shut down assembly lines so that workers could hear Liberty Loan speeches and make purchases. The Treasury’s advertising men appealed to every group it could think of, except blacks. The editors of the Afro-American in Baltimore noted the lapse but urged their readers to buy Liberty bonds anyway, “in order that we may measure up to the standard of good citizenship.”
Not wanting a penny of the $2 billion loan to go unsold, McAdoo made sure that it was oversubscribed. He stumped the country as if he were running for president, explaining how the bonds worked and why the money was needed. Somewhere in his travels, the Liberty Loan became known as the First Liberty Loan. Oversubscribed by $1 billion, it attracted four million investors. With a few months to prepare for the Second Liberty Loan, McAdoo was able to mount a sales campaign that would do even more to capitalize on the emotion of the people. By the time the second loan went to market, 150,000 American soldiers were in Europe, and hundreds of thousands more were in training camps. McAdoo took it as axiomatic that the parents of soldiers in France would not hesitate to buy the bonds if the need for the money was well explained. In all, his four Liberty Loans, two in 1917 and two in 1918, raised nearly $17 billion, $7 billion of which was lent to the Allies. The government spent $24.3 billion during the two fiscal years that began July 1, 1917, about one third from taxes and two thirds from borrowing. McAdoo had guessed right.
But neither McAdoo nor his successor, who raised another $4.5 billion in a 1919 Victory Loan, accurately reckoned the total bill for of the war. A decade later, the Treasury put the cost at $37.5 billion, which included the principal and ten years’ worth of interest on the Allied loans. The Allies borrowed a total of $9.5 billion from the United States, and by 1930 they owed $11.3 billion. McAdoo became the scapegoat. When his critics said that the loans had been gifts in disguise, he pointed out that the Allies had signed loan agreements. With the entire world mired in the Great Depression, he understood that European exchequers could not simply hand over the money. Still, it galled him to hear Europeans refer to Uncle Shylock and complain about American greed. He was angry enough to devote a chapter of his memoir to the Allied loans, and while he managed not to swear, he damned them all: “It is well, in considering these baseless aspersions, to remember that the United States is the only nation arrayed against Germany that did not seek or receive indemnities or colonies when the war was over.”
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Wilson’s management of the war was not perfect, and his decision to champion U.S. neutrality until the last possible moment forced his lieutenants into a mad scramble when war was declared. Most of them had given serious thought to the actions they would have to take in the event of war, but Wilson’s refusal to allow them to make any visible move suggesting an abandonment of neutrality caused innumerable delays. American forces ultimately proved vital in curbing the U-boats and ending the stalemate on the Western Front, and Wilson was hailed in London, Paris, and Rome as the leader who saved the world from the kaiser. If the Allies had lost, Woodrow Wilson would have been remembered as one of the worst presidents in American history. But luck was with him. The Americans arrived just in time. The credit for that belongs to Robert Lansing, who had persuaded Wilson to make war in the name of democracy, the only rationale the president could stomach. Newton D. Baker amassed an army of more than four million in a year’s time. Josephus Daniels proved nimble and shrewd in deploying the navy. Bernard Baruch and Herbert Hoover gave industry and agriculture their marching orders and kept them on the march. William G. McAdoo figured out how to fund the American war effort and simultaneously stave off the insolvency of the Allies. As chief executive of the mobilization, Wilson deserves credit for two things: talking the war Congress into a vast but temporary expansion of presidential power and making excellent use of the right men.
