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Show " i Taking the Profit j Out of War By BERNARD M. BARUCH Reprinted from The Atlantic Monthly. to sell to any'dealer violating the reg- , ulations. The Armistice stopped the . execution of this plan. Another plan of this nature: The j ! manufacturers of men's and women's wearing apparel had in 1918 been called call-ed to Washington, together with the retailers of various goods, and notified that regulations would have to be made in regard to retail prices and standardization of clothing. The rulings by the board were made known through the issuance of official bulletins at irregular intervals and . were widely distributed by the press, : which co-operated in this most necessary neces-sary work with a whole-hearted pur- j ' pose that gave to the orders of the , War Industries Board the Instant and j broad circulation they required. Mr. Hoover already was doing much to perfect-his control of food products and prices. There was also talk of fixing rents, and In some cities this was done. (CONCLUDED NEXT WEEiK) . I The February issue of the Atlantic for 1925 carried a paper by Mr. Sisley Huddleston dealing with the general subject of "taking the profit out of war," which Mr. Huddleston called "An American Plan for Peace." The first-quoted phrase was put into the language by the War Industries Board toxcard the close of the World War through its efforts to eliminate all war profits. Mr. Euddleston's article came to the attention of Mr. Bernard M. Baruch. chairman chair-man of the War Industries Board and administrator of the non-profit plan, and (as he writes us), since it seemed to indicate a growing interest in the. idea, induced him to invoke practical means to bring about a full comprehension compre-hension of taking the profit out of war in the various great countries of the world. To this end he responded to a suggestion of Mr. Owen D. Young, of the Page School of International Relations at Johns Hopkins University, that he establish a course of lectures there to expound the War Industries Board plan in detail. Later he will proceed to make similar arrangements at leading universities in Great Britain, France. Germany, Italy, and Japan. Agreeing with Mr. Barucfh that the subject calls for public knowledge and discussion, it was natural for the Atlantic to turn to him for the following paper. The Editors of The Atlantic Monthly. 1 War was once described as Prussia's Prus-sia's most profitable industry. It needs only a scant examination of history to learn that other countries were open to the same indictment. The methods of the Robber Barons did not pass with the end of feudalism. feudal-ism. Annexation by conquest did not cease. But when America entered the "World War President Wilson fathered a doctrine that shall always govern us that never a foot of territory would be added to our boundaries by force. So, as America has taken the lead toward making impossible national profit through war, it too may be America's privilege to point the way toward making impossible indivTdna! profit through war To take the profit out of war Is to take a long step toward to-ward creating an economic detestation detesta-tion of war. The experience of the United States in the World War affords af-fords a basis for the belief that the plan herein discussed is practical. In fact, it is more than a belief it is a certainty, although not widely known. The world is such a busy place, and the radius of human activity has been so greatly enlarged because of modern Inventions, that it is not strange that there are hut few people who are conversant con-versant with what was quietly but effectively taking place in this country coun-try in the mobilization and use of its material resources in the World War a process that would have eventually eventual-ly eliminated all Improper profits. Strength is given to the public advocacy ad-vocacy of industrial mobilzation made by both President Harding and President Presi-dent Coolidge Mr. Coolidge as recently re-cently as last October in his Omaha speech to the American Legion by the fact that the plan they advocated as a part of the regular national war agencies had once been set up and successfully operated under the War Industries Board. Preceding the President's recent clear exposition of this subject, some degree of public interest had been engendered en-gendered by an exchange of letters between be-tween Owen D. Young (of Dawes plan fame), in behalf of the Walter Hines Page School of International Relations, Rela-tions, and the writer. The corre-! corre-! spondence. resulted in the establishment establish-ment of lectures at the Page School (of Johns Hopkins University) on this theme. Previously the Atlantic Monthly Month-ly printed an article by Sisley Huddleston, Huddle-ston, who pointed out that Europe saw great strides toward peace in the American idea of "taking the profit out of war" in a systematic way. His basic reference was to the plan of the War Industries Board. The resources of a country might be referred to as the five M's: (1) man power; (2) money; (3) maintenance main-tenance or food: (4) material resources re-sources (Including raw materials, manufacturing facilities, transportation, transporta-tion, fuel and power); and (5) morale. The intelligence with which the first four are directed and co-ordinated as a whole will determine the fifth, the morale of the community. , In the war emergency it early became be-came evident to those who were charged with the responsibility of mobilizing the resources that there I was a just sentiment among the peo-j peo-j pie against profiteering. Profiteering might be willful and profit making might be involuntary; but. whatever Its form, there was a just determination determina-tion It should cease. So it became necessary to fix prices where the supply sup-ply was limited. 1 Wherever the government created a shortage by Its demands, prices were fixed, not only for the Army, Navy and the Allies, but for the civilian population popula-tion as well. And in addition to price fixing on war essentials (such as steel, wool, copper, and so forth), the balance, bal-ance, after the war program had been ; filled, was rationed or distributed according ac-cording to the priority needs of the i various civilian demands. In other words, where the price of the product j of an industry was fixed that Industry had to deliver the part which the gov-i gov-i ernment did not need to the civilian ! population, not in the way the indus-: indus-: try chose, but, as the government dJ-J dJ-J rected. It must be remembered that when j the war came there was no adequate preparation. Indeed, it. isdoubted by the best authorities whether any effective ef-fective form of preparation then known would have been of much avail in view of the widespread and engulfing engulf-ing results of the war and the lack of knowledge of the various instruments of destruction which were being devised de-vised and which it became necessary to combat. Our own Army had several divisions competing one with another for materials,, mate-rials,, transportation, housing, and so forth. On top of that there prevailed the demands of the Shipping Board, with the slogan that ships would win the war, and of the Food Administration, Administra-tion, with the slogan that food would win the war. Further, there was the Railroad Administration with its need for material and labor, and finally there was the feverish quest for labor and supplies on the part of the munition muni-tion makers all competing for labor, money, materials, transportation, fuel, power, and each insisting on the greater importance of its activity. All this while the labor supply was being lessened by the flow of men into the Army. While an endeavor was being made to bring order out of chaos, the great undertaking had to go on. Men, ships, munitions, food, material, had to be provided. Old organizations, bureaus and traditions had to be met and changed, but not destroyed until the new was set up. The wonder of it all is, not that there were so many mistakes, mis-takes, but that so much was accomplished. accom-plished. At the time we entered the war prices were at their peak, and tending higher because of the war's insatiable demands. The problem was not alone to secure the materials and labor and to stop the confusion, but to do it in such a way that the morale of the people peo-ple would be maintained. The prices of some things, like steel and copper." were fixed far below prevailing rates, and the wages of labor in those industries indus-tries were standardized. The more highly organized an industry, the easier it was to, arrange. Order did not commence to appear until the Army tunneled its needs through one man sitting with a section of the War Industries Board and until the Navy, Shipping Board, Allies and Railroad Administration did likewise. Each department de-partment satisfied its requirements through a central authoritative body This Was called the War Industries Board, controlling and directing all materials and co-ordinating through its chairman the whole system of governmental gov-ernmental and civilian supply and demand. de-mand. It was created by executive order in March of the year 1918. Briefly, this board endeavored to mobilize the Industries of America so that the fighting forces of the Allied and associated nations could draw from the United States the last reservoir res-ervoir of men, materials and money the things needed- for the winning of the war at the time the things were needed and with the least dislocation of industry and the least disturbance of the civilian population. II The War Industries Board was organized or-ganized like any other supervisory committee, with a chairman, vice chairman, members In charge of various va-rious activities, bureau chiefs and sub ordinate workers. It surveyed and sought to arrange the whole industrial war field under the plenary powers conferred by the President and the Congress. How well it did this is a story for others to tell. What it did is the basis of the plan I am here drawing. It was comparatively easy to fix prices and to distribute materiais, and indeed to stabilize the wages of labor in those industries in which prices were fixed. The labor situation, however, how-ever, became increasingly difficult, particularly when General Crowder found it necessary to withdraw men for the proposed campaign of 1919 after 4,000,000 soldiers had already been taken. Much has been said about the profiteering profi-teering of labor. It is an unjust accusation. accu-sation. It is only fair to say that this condition was primarily brought about through the inexperience of the organization organ-ization within our own governmental departments and by the furious bidding bid-ding of munitions makers and ship builders for services. That situation, together with the increased prices of the things that labor had to buy with the results of its work, made it inevitable inevi-table that labor must get higher wages. So it became evident that the price fixing program had to go even fur-.ther, fur-.ther, and the War Industries Board, when the Armistice came, was proceeding pro-ceeding with a campaign to fix the prices of all the basic things that la-: la-: bor had to buy. Some had previously been fixed. I speak of labor in a much broader sense than manual labor, for the unorganized so-called "white collar" col-lar" part of our community clerks, teachers, government employees, professional pro-fessional men were less able to meet the situation than labor in the nar rower sense. For the protection and relief of such groups certain plans were devised. To illustrate One of them provided that manufacturers, manufac-turers, jobbers and retailers of shoes could make and sell shoes only of a specified quality at a fixed price, ef-i ef-i fective July, 1919. No one who did not have a card of the War Industries Board In his window could sell shoes, and only the standardized shoes could i he sold. No jobber or manufacturer would sell shoes to anybody who did not have this card. The shoes were to be stamped Class A, B or C and had to be of the quality prescribed and sold at the price fixed. The country was so organized in every district that there could be immediately reported to Washington the name of any shoe retailer who did not carry out the ree- ulations of the War Industries Board I as to price and quality. Through re-', re-', strictions on his labor, money, raw I materials and transportation no manufacturer man-ufacturer would have been permitted |
