All through the frustrating summer of 1917 executives who had come to Washington at real personal sacrifice sweated long hours in airless offices laying, amid confusion and heartbreak, the groundwork for the efficient procedures of the following year. Already in the Advisory Commission they were talking of an army of a million men.
The first efforts had to go towards changing the methods of procurement already established. The army, navy and the allied purchasing commissions must be kept from bidding against each other for scarce supplies. Every method from patriotic appeal to brute force had to be used to curb the catastrophic rise in prices. A system of priorities had to be invented, and a clearing house established, where the needs of the various services and of the Allies could be appraised. Communications had to be kept open between Washington and the local committees of the various industries and chambers of commerce. The railroads had to be induced to drop competitive systems favored by the Sherman Act. Ships, wooden ships, steel ships, concrete ships—anything that would float—had to be built on a scale and at a speed never before imagined.
It was inevitable that duplications and conflicts should arise. Each commission tended to struggle with its own problems without reference to the work of its neighbors. “We used the words coordination and cooperation until they were worn out” wrote Herbert Hoover of this period. “We surrounded ourselves with coordinators and spent hours in endless discussions with no court of appeal for final decisions.”
The President had become almost unapproachable in the White House. Tumulty could always be reached, but he never pretended to understand industrial problems; politics was his field. Even the faithful secretary’s private opinions had to be transmitted by letter. All he could do was lay documents on the President’s desk.
The Secretary of War was engrossed with the complications of the expanding army. McAdoo at the Treasury took a broad view of the needs of the war machine, but, although still Mac, and a member of the family at White House meals, he was not listened to as carefully as in the past: Edith Wilson suspected him of having been opposed to her marrying the President.
There remained the roundabout method of approach through the good offices of the confidential colonel in his New York apartment, but House’s visiting hours were limited; and sometimes even he had to wait for days for the privilege of visiting the President in his study.
It was inevitable that out of the welter of jostling commissions, striving to bring order out of the chaos of production and supply, certain agencies should assume primacy over the rest. Bernard Baruch of the Advisory Commission’s subcommission on raw materials developed extraordinary talents as coordinator of coordinators. Before long the commission he headed became the War Industries Board and central in the organization of supply.
Bernard M. Baruch had no administrative training whatsoever. At fortyseven he had accumulated a fortune which Wall Street estimated in the tens of millions as a lone speculator on the stock exchange. Although flatterers called him a financier, he showed neither pride nor shame in his career as speculator.
Un Prince d’Israel
Baruch was the son of a German Jewish doctor who had emigrated to America as a very young man and served as a surgeon in the Confederate Army. His mother, known in the family as Miss Belle, came of a prominent Sephardic family long established in the South. He was born and spent the first ten years of his life in Camden, South Carolina, where his father, a wellread man of varied interests, practiced medicine and carried on agricultural experiments that were more prophetic than profitable. Miss Belle gave music lessons.
When Bernard was eleven, Dr. Baruch, who wasn’t making much of a go of it in Camden, moved his family to New York. Bernard went through the public schools and the City College. He grew up a tall slender active youth. A blow from a bat in a ballgame that ended in a scrimmage left him permanently deaf in one ear. Although his parents wanted him to be a professional man he couldn’t decide what career to take up.
About the time he graduated his father became resident physician at a summer hotel on the Jersey coast Bernard, who had already shown more interest in poker than in his studies, became a habitué of the Monmouth track. He had a good memory and an analytic mind. He devoted himself to gambling with singlehearted devotion. An adventurous spirit carried him out to Cripple Creek. There he did surprisingly well playing poker, but when he invested his winnings in mining stock, he lost every cent. He came home broke and took a job as a customers’ man in a brokerage house at twentyfive dollars a week.
Twentyfive dollars a week was considered good pay for a young man in the nineties. Baruch had presence. His ebullient charm was mingled with a certain unassuming personal dignity. He never lost his pleasant South Carolina manners. Un prince d’Israel, Clemenceau was to call him.
With his savings out of his paycheck he began to speculate in earnest. His retentive memory and his knack for analyzing every factor of a business situation stood him in good stead. He paid no attention to Wall Street gossip but made it his business to know what was behind every stock he traded in.
At twentyseven he married, and bought himself a seat on the New York Stock Exchange.
His associates and customers were in the higher brackets. He traded in tobacco with Thomas Fortune Ryan. At the outbreak of the Spanish War, he got to a cable before any of the other brokers, and made a killing in the London Stock Exchange. His specialty was playing the bull market. At thirtyfour he was a millionaire and already somewhat disgusted with moneymaking. He had friends in every walk of life. Garet Garrett kept telling him he ought to turn his great abilities to the public service.
From the days when he was a small boy in Camden he’d loved to shoot quail. He bought himself one of the great South Carolina plantations, known as Hobcaw Barony, near Georgetown. There he entertained lavishly. He indulged his taste for racehorses.
A congenital Democrat, and known to be openhanded with his money, he was much sought after by the politicians. Democratic chairman McCombs introduced him to Governor Wilson at a fundraising dinner in 1912.
Immediately Baruch became a devoted adherent of Woodrow Wilson’s. The feeling was mutual. Wilson liked Baruch, he found him learned in matters pertaining to finance and industry on which he himself admitted ignorance. Here was a financier from wicked Wall Street who had no pride in his money bags, who liked to talk about human values, who listened with reverence to Wilson’s plans for the country. He called Baruch “Dr. Facts.”
In the dark days of the 1916 campaign Baruch was a solace. He brought his aging parents to Shadow Lawn to tea. He became a family friend. McAdoo esteemed him highly. Mrs. Wilson liked his humorously deferential manner. He shared with Grayson a passion for horseflesh. Though the recently appointed admiral was a notoriously bad shot, he was often invited to hunting parties at Hobcaw Barony.
When Baruch went to work with the Advisory Commission his colleagues marvelled at how little he exploited his “in” at the White House. Already he was being talked of as the man to head a general purchasing agency. The multimillionaires who dominated steel and iron and copper and tin listened to Baruch as one of themselves. At the same time he’d made his money in such a way that he had no ties with any particular industry. He’d taken advantage of them all, playing the rise and fall of Wall Street’s tides. His knack for sizing up the potentialities of the various industries, which had made him a master speculator, prepared him for the worldwide trading operations of procurement for war. He had zest for the work, and the shrewdness needed to pick good subordinates and to back them up unreservedly so long as they did what he considered a good job. Being new at administration he had no bad habits of “reference and deference” to overcome.
Only to the President did he defer. With a boyish sort of heroworship he tried to anticipate Woodrow Wilson’s every wish. Whenever he arranged a set of purchases or dug out a piece of information, he made Woodrow Wilson feel that he was doing it for him, personally.
Baruch had at that point
no legal authority to corner raw materials. His operations depended on cajolement and the patriotic appeal. His associates worried themselves sick during the summer and fall of 1917, wondering why he didn’t ask the President directly for the powers he needed to enforce his demands; why he allowed Secretary Baker, who distrusted him, to build a rival agency in the War Department under Stettinius of J. P. Morgan and Co. As Secretary Lane liked to say, Woodrow Wilson moved slowly as a glacier. Perhaps he was afraid of stirring up Democratic oratory in Congress by appointing a Wall Street man.
Finally, when McAdoo tried to enlist Baruch for a Treasury post, Wilson revealed his intentions: “I’m mighty sorry but I can’t let you have Baruch for the Finance Corporation,” he wrote his soninlaw. “He has trained now in the War Industries Board until he is thoroughly conversant with the activities of it from top to bottom, and as soon as I can do so without risking new issues on the Hill I am going to appoint him chairman of that board.”
That strenuous summer of 1917 saw the beginning of the proliferation of federal agencies that grew into the leviathan of years to come. Since nobody in government had the ability to run them, they had to be run by businessmen who signed on for the duration.
Chapter 13
THE TURNING POINT
IN April 1917 Allied prospects were if possible worse at sea than they were on land. The British Grand Fleet, to be sure, kept the Kaiser’s navy in a coop back at Heligoland, but the U-boats fulfilled the German admirals’ wildest hopes. At the most there were never more than a hundred and thirty largesize submarines in commission at any one time, besides the small coastal types that harried British commerce with the Scandinavian countries. They were based on the inland port of ancient Bruges in conquered Belgium, and slipped out into the North Sea through the shipcanals to Ostend and Zeebrugge.
The first onslaught of the U-boats was appalling. A fourth of the merchantmen leaving British ports that April never returned. In thirty days the Allies lost almost nine hundred thousand tons of cargo space.
To Keep the Sealanes Open
Optimistic British propaganda, filling the American newspapers with accounts of imaginary victories, so overreached its aims that nobody in authority in Washington knew the extent of the peril. President Wilson had a general inkling of the situation, but from another angle.
Like so many Americans, his knowledge of naval warfare stemmed from boyish enthusiasm for American successes in the War of 1812. He saw American merchantships fighting their way across the Atlantic in the name of the freedom of the seas. He was much preoccupied with the arming of merchantmen. Obviously the first prerequisite for keeping the sealanes open was close cooperation with the British Admiralty.
From what reports he could get the British Admiralty seemed opposed to the idea of conveying merchantships. Ambassador Page, who had cried wolf so long that there was a tendency at the State Department to write off his messages as wartime hysterics, sent a particularly urgent cable on the shipping situation. This time it was listened to.
“The main thing,” the President was writing Josephus Daniels as early as March 24, “is no doubt to get into immediate communication with the Admiralty.”
The wordy North Carolinian, whom some naval officers claimed was more interested in saving his sailors from the Demon Rum and improving their educational opportunities than he was in the problems of combat, reluctantly picked the head of the Naval War College at Newport, recently appointed Rear Admiral Sims, as the man most likely to get along with the Britishers. According to some accounts it was the aristocratic young New York politician, Franklin D. Roosevelt, serving in the post of Assistant Secretary of the Navy, which had furnished his famous cousin Theodore a springboard into national politics, who urged Sims’ appointment.
Sims had the reputation of being a desperate anglophile. He was called to Washington, warned against letting the British pull the wool over his eyes, and ordered to proceed to London immediately. Since war had not yet been declared, the admiral must travel incognito. He was not even to take his uniform.
On March 31, entered in the passengerlist under the name of Mr. V. J. Richardson, with his aide disguised under another alias, Admiral Sims sailed for Liverpool on the U.S.S. New York of the American Line. The captain and crew were immediately aware that there was something special about this loquacious civilian. The last man in the world for a secret mission, Sims had the reputation of being the most indiscreet officer in the American service. He had a smiling manner that kept belying the dignity of his neatly trimmed gray beard, of the type affected by flag officers in the Royal Navy, and the impressiveness of his massive physique. Now a handsome genial outgoing man of fiftynine, he had managed throughout a stormy career to get away with saying what he thought and more than he thought, on every topic under the sun.
Sims of the Flotilla
Like General Pershing, Admiral Sims was a discovery of Theodore Roosevelt’s.
William Sowden Sims was the son of a Canadian engineer who moved to Pennsylvania as superintendent of a coal and iron company, and became a United States citizen. Young Sims grew up a goodlooking high-spirited youth, with more taste for practical jokes than for organized study. When the local congressman, in some way beholden to his father, offered him an appointment to Annapolis, he barely scraped his way in after a couple of tries at the examinations.
In 1876 the navy was still in the period of transition from sail to steam and from wooden ships to ironclads. Only an intermittent student, Willy Sims had a sharply inquiring mind. Seaduty gave him time to read. As a subaltern he plunged into Buckle and Darwin and Huxley.
He became an enthusiastic student of Henry George. For publicspirited Americans it was an age of reform. Everybody must pitch in to make a better world. The reforming zeal that carried T.R. into state and national politics carried Sims into the study of naval organization and the new techniques of warfare on the seas.
His first cruise as a cadet was on the old frigate Constellation. He served on the Swatara, described as a thirdrate shiprigged sloop of war, when she still had muzzleloading smoothbore guns. His first ironclad was the four thousand ton Philadelphia of the “Great White Fleet.” In the late eighties, as a lieutenant junior grade, he took a year’s leave to board in a Paris pension and study French. He read French books and haunted the theatre and took fencing lessons. He returned to seaduty with a reputation for dandyism and breadth of culture.
He first attracted notice at the Navy Department by the excellence of his reports while on the China station during the Chinese-Japanese War in 1895.
When the Intelligence Department sent him to the Paris Embassy as naval attaché, he spent two years investigating every navy yard in Europe. Theodore Roosevelt was Assistant Secretary in those days. The department sent Lieutenant Sims a formal appreciation of his report. At the bottom of it was scrawled “Not perfunctory. I wish to add my personal appreciation of it. T.R.”
Sims went back to seaduty as a full lieutenant on the China station convinced that the American Navy had much to learn about the construction of ironclad fighting ships and was dangerously backward in gunnery. In Hong Kong he struck up a friendship with a Britisher who was applying Sims’ sort of inquiring mind and a talent for invention to the improvement of marksmanship in the Royal Navy.
In a series of reports on the British advance in the art of gunnery, Sims tried to puncture the complacency of the bureaus at the Navy Department The reformer was on the rampage. When his reports brought no action he risked his career by writing directly to Theodore Roosevelt, whom Czolgosz’s bullets had recently made President.
T.R. was not a man to worry about channels. Instead of turning young Sims in to his superiors, he wrote him a frank reply saying he doubted if things were as bad as Sims thought. When months passed and nothing further happened, Lieutenant Sims, who was passionately convinced of the rightness of his position, wrote the President again. All of a sudden ordered to report to Washington, he returned home full of forebodings
of a courtmartial for insubordination. Instead he found himself appointed inspector of target practice for the Bureau of Navigation.
He hadn’t been too long in Washington before he was lunching at the White House. Sims was a great talker. He had a sailor’s fund of stories and anecdotes. There was an innocent candor about his conversation as there was about his personal life. An active and muscular man he delighted in feats of strength. He and T.R. were two of a kind. They hit it off immediately.
With the President’s backing Sims was able to impose his theories of central fire control on the Bureau of Navigation. After the Russo-Japanese War he plunged into a controversy with another friend of T.R., Captain Mahan, the historian of seapower. Mahan interpreted the accounts he’d read of the Battle of the Sea of Japan as proof of his contention that guns of mixed caliber gave a ship more firepower than the all big gun ordnance Sims and his friends in the Bureau of Navigation were advocating. The British put an end to that argument by producing the Dreadnaught. Sims reported to the Navy Department that the Dreadnaught made all the navies of the world obsolete from the day she was launched.
Captain Mahan, who was far from being a small man, admitted that his information on Japanese ordnance might have been faulty. Sims became known, in British and American circles, as one of the men who’d guessed ahead of the Admiralty on the Dreadnaught. The British civil lord asked permission to have Lieutenant Commander Sims’ report published in Blackwood’s Magazine.
Sims, who had a way of chumming up to his English friends whenever anything new was in the works, managed to turn up in England. In spite of the fact that the Admiralty was wrapping the Dreadnaught in portentous secrecy, Sims got himself smuggled on board in civilian clothes and was shown every detail of construction and ordnance. When he came home President Roosevelt appointed him his naval aide.