World War I, Economic Mobilization For
WORLD WAR I, ECONOMIC MOBILIZATION FOR
WORLD WAR I, ECONOMIC MOBILIZATION FOR. European demands for war supplies mobilized some sectors of the American economy before the United States entered World War I. Exports increased from $2.1 billion to $2.6 billion annually between 1911 and 1914 and jumped to $5.7 billion in 1916. Changes in the public sector were less dramatic. The government established the National Advisory Committee for Aeronautics, the U.S. Shipping Board, and the Council of National Defense, with an advisory commission, before 1917. But President Woodrow Wilson's policy of neutrality and the powerful peace sentiment in Congress and the rest of the country precluded systematic planning for a war economy.
The private nature of economic mobilization in the United States did not disappear after U.S. entry into the war on 6 April 1917. Throughout the spring and summer, volunteer committees of corporation executives tried to design production, transportation, and price schedules for army and navy supplies. Congress and the president, in the meantime, clashed over the nature of the government's economic policies and administrative controls, and the military services scrambled for supplies in an essentially free market. But much of the output of vital materials, such as steel and coal, had already been committed for months in advance to private and Allied purchasers.
In July 1917 the president increased the scope and power of the U.S. Shipping Board and established the War Industries Board (WIB) to regularize business-government relations. On 10 August Congress empowered the president to control food and fuel supplies and to fix a minimum price for wheat. Congress continued to yield to presidential initiatives in subsequent months, albeit reluctantly, and the War Trade Board, the Alien Property Custodian, and the Aircraft Board appeared in October. By that time, the administration had also taken the first tentative steps toward fixing prices on industrial raw materials.
Urgent Allied demands for ships and munitions, as well as transportation breakdowns in the desperate winter months of 1917–1918, touched off a much more rigorous extension of public economic controls in 1918. The president enlarged and redefined the functions of the WIB early in March and set up the National War Labor Board and the War Finance Corporation in April. The WIB's Price Fixing Committee negotiated a series of maximum prices with raw-material producers, and its Priorities Board broadened the range of restrictions on nonwar production. The military services launched a variety of internal reforms that made it easier for the board to coordinate its economic policies.
Wilson inaugurated a series of weekly meetings with his top war administrators in the spring of 1918, but the administration never fully centralized the responsibility for economic mobilization. The WIB offered the greatest potential for such a development, but the armistice of November 1918 came before all aspects of economic mobilization were fully integrated. Achievements varied, therefore, from one sector of the economy to another. By the time of the armistice, for instance, there were surpluses in some agricultural products and industrial raw materials, while production lagged in ships and aircraft.
Beaver, Daniel R. Newton D. Baker and the American War Effort, 1917–1919. Lincoln: University of Nebraska Press, 1966.
Urofsky, Melvin I. Big Steel and the Wilson Administration: A Study in Business-Government Relations. Columbus: Ohio State University Press, 1969.
Robert D.Cuff/c. w.
See alsoCouncil of National Defense ; Distribution of Goods and Services ; National War Labor Board, World War I ; Price and Wage Controls ; Shipping Board, U.S. ; War Finance Corporation ; War Industries Board ; War Trade Board .