outbreak of the war, and accompanied the American mission to Russia in 1917.
Goethals reorganized all the procurement agencies of the War Department, taking many of them away from the former bureaus and building up a new organization under himself. In Jan. 1918 Brig.- Gen. Palmer E. Pierce was made Director of Purchase and Supply, while Edward L. Stettinius, a banker who had acted as buyer in America for the Allies, was made Assist- ant Secretary of War to cooperate with him. In April the Pur- chase, Storage, and Traffic Division of the General Staff took over the functions of both of these divisions, and, as " P., S. and T.," under Goethals became the most visible of the War Depart- ment agencies at the national capital. Stettinius was sent abroad to the Inter-Allied Munitions Council, and Benedict Crowell became Assistant Secretary of War and Director of Munitions. (Crowell, America's Munitions, 1917-1918, Washington 1919.)
The reorganization of the War Department, the expansion of the Navy Department, the creation of the War Boards, and the rise of the War Industries Board as the coordinating agency were simultaneous processes. The condensation of so much activity in a few months makes it difficult to award praise or blame to individual organizations; but at the date of the Armis- tice the new War Government was functioning, having converted the United States to the single purpose of winning the war.
Labour. The six great war boards included all the fundamental elements except labour. By the adoption of the Selective Service Act (May 18 1917), the policy was established of permitting only those to serve with the colours who could be spared from the tasks of production, and before the end of the year the draft registrants were classified according to their industrial importance. Labour was brought into cooperation with the scheme of procurement through the various committees organized by Samuel Gompers for the Advisory Commission, and the Government agreed that, in con- sideration of an attempt on the part of Labour to keep the work moving, the United States would endeavour to preserve the stand- ards and health of Labour as against the dangers of rising wages, labour scarcity and uneven housing conditions. In each of the larger war agencies some sort of Labor Bureau or adjustment com- mission was created, and Congress acted upon the initiative of a committee of the Council of National Defense by making appro- priations for housing facilities in congested regions, which were administered in part by the U. S. Housing Corporation, and in part by the Shipping Board. Early in 1918 the Department of Labor created a commission of employers and labour to draw up a formal programme for labour treatment. As a result of the report of this body the President created (April 8 1918) the National War Labor Board, presided over by ex-President William H. Taft and Frank P. Walsh, to act as a supreme court for the adjustment of labour disputes. This was followed (May 13 1918) by the appointment of a National War Labor Policies Board, upon which all the producing agencies were represented, whose function was to determine standard policies and eliminate inequalities prevailing in the practices of the numerous production agencies. Within the Department of Labor various labour services were inaugurated or expanded, notably the Children's Bureau, the Woman in Industry Service, and the Employ- ment Service. On Aug. I 1918, by executive order, the Employment Service took over through its own offices the whole task of placing unskilled labour in American industry in order that labour priority orders might be respected and that the employees of one concern might be freed from " wage raids " made by other establishments. All private employment offices were closed, and labour was generally driven out of non-essential occupations by two orders: (l) a ruling of the Provost-Marshal-General denying deferred classification under the draft on grounds of dependency to men engaged in the occupa- tions marked non-essential on his list (May 17) ; and (2) a classifica- tion of industries by the Priorities Division of the War Industries Board grouping industries in the order in which it was important and permitted that they be supplied with fuel, raw materials, transporta- tion and labour (Sept. 3).
Government-Owned, Corporations. In the execution of the muni- tions programme a device relatively new to American practice was frequently used in the corporations whose capital stock was entirely owned by the Government of the United States. Government pro- duction was normally slow and expensive because of the red tape and lethargy inherent in civil service establishments. Financial operations were embedded in legal requirements adopted not to expedite work but to ensure honesty in expenditure. Private busi- ness, on the other hand, could make decisions and apply funds with the promptness desired of Government offices in time of war. The Shipping Board Act authorized the creation by the Shipping Board of a corporation all of whose stock should be subscribed by the board out of a fund appropriated by Congress. As stockholders the mem- bers of the board elected directors for the corporation (generally themselves) ; and the directors were at liberty to disregard Govern-
ment red tape and to act as freely as any private directorate under the general laws of the state granting the charter. The Emergency Fleet Corporation was organized pursuant to this authorization, and the freedom of action thus obtained inspired other war boards to imitate the process. The U.S. Grain Corporation and the Sugar Equalization Board were created by the Food Administration to administer the work of stabilizing the price of flour, sugar and coffee. The Spruce Production Corporation was jointly owned by army and navy aircraft interests and the Allies, who were thus required to pay their share of the overhead charge in producing spruce lumber for aeroplanes. The War Finance Corporation was a subsidiary of the Federal Reserve Board, doing a banking business in buying war-loan paper from individual banks. The War Trade Board Russian Bureau was organized in the closing days of the war when it appeared that Government stimulation of trade with Siberia would be useful. The U.S. Housing Corporation was an operating subsidiary of the Department of Labor. (F. L. P.)
III. THE CENTRAL POWERS
No department of army supply gives so clear and compre- hensive a picture of the whole war administration of the Central Powers as that of the munitions supply. The error of the peace-time preparations lay in the under-estimation of the' length of the war and of the fighting needs, and in the inadequate provision for the mobilization of industry. With this naturally went deficient arangements for building up reserves of raw material. The difficulties were the greater, since, owing to the effects of the blockade, the supply of food for the army and for the civil population were largely parts of one and the same indus- trial problem, owing to the many points of contact between the respective demands. Quite apart from the question of coal and taking, for instance, fats, sugar, and alcohol, all needed in the manufacture of explosives in Austria-Hungary 50,000 tons of sugar had to be withdrawn for that purpose from the food supply in a single year, while in Germany during a like period 900,000 tons of potatoes were used in the production of alcohol for explosives. Military supplies of many other kinds were also greatly affected by the demands of the Munitions Depart- ment. Almost the whole of the national economic life had to be adapted to this particular necessity, and in this respect the situation was truly that of a beleaguered fortress. The home industries had to be specially developed in order to meet the pressing need; and it was here especially that Germany took the lead among her allies. Because of her superior strength she had to be responsible for such of their supplies as their own means were inadequate to provide. This amounted to practically the whole in the case of Turkey and Bulgaria. A consideration, either of the war economy as a whole or of the supply of muni- tions alone, may therefore be properly confined to the perform- ance of the two great Central Powers.
At the beginning of the war, and even more in its earlier months, Austria-Hungary depended upon Germany's mightier and more complex production for various kinds of war material, and especially for certain important raw materials. The Danube monarchy was far from being so homogeneously organized as either Germany or France. In contrast to the highly developed and qualitatively important industries of Lower Austria, parts of Steiermark, Bohemia, Moravia, and a few small Hungarian centres, there were vast areas which were entirely impotent in an industrial sense. The form of the political system also prevented complete central control of the whole available strength of land and people. Regions of advanced culture existed side by side with immense tracts which were hardly at all developed. Austria-Hungary was always greatly inferior to Germany in the matter of raw materials. Her sole advantage lay in the naphtha wells of Galicia; and this ceased to exist soon after the beginning of the war, when the Russians invaded that region. The scarcity of coal was always a great difficulty; even in peace-time she was dependent on Germany for supplies. The Austro-Hungarian Empire possessed an iron and steel industry of the first rank as regards quality. Quantitatively, it could not compete with the German industry, chiefly owing to the above-mentioned lack of coal, but qualitatively the product was not only not inferior to that of Germany, but it ranked next to the English high-grade steels in the world-markets. The magnificent armament industry was second only to this well-
