War Industries Board

The creation of the War Industries Board (WIB) was one example of how World War I transformed the relationship between the government and civilian society when the nation for the first time organized its resources to fight a total war. The WIB functioned as the main government clearing house that coordinated the channeling of civilian resources to meet the military's ever-growing industrial and transportation needs. Despite its lack of a clear legal mandate, the board played a major role in most sectors of the economy during the [Page 899]war, particularly during the latter period of U.S. involvement. Its functions included the prioritization and allocation of raw materials, the formulation of production priorities, price fixing, the establishment of transportation priorities, and intervention into labor markets.

The evolution of the WIB was complex, with several roots. One model and predecessor was the Navy Consulting Board (NCB), founded in July 1915. The NCB formed a partnership among Navy Department staff, industrial leaders, and second tier naval officers. Through this body, production capabilities and priorities were surveyed and discussed, but the NCB never actually set in motion any mobilization plan. A second strand of origin came from the National Defense Act of 1916. The act gave the president the power to make any order for war material obligatory. It also authorized a survey of U.S. industry to determine war production conversion capabilities. Because Pres. Woodrow Wilson campaigned on a moderate peace platform in 1916, little was done to implement these provisions until after the election.

The Council for National Defense (CND) was the forerunner that would most directly evolve into the WIB. The CND was a voluntary organization that brought private sector leaders together with pro-preparedness governmental officials. By the second half of 1916, the government was funding the CND, and the wealthy financier, Bernard Baruch had emerged as a key figure within the organization. Southern born, but deeply entrenched in New York financial circles, Baruch had excellent ties to both industrial leaders and government officials, as well as close links to both the southern and Wall Street forces of the conservative wing of the Democratic Party, including President Wilson.

With the break in diplomatic relations with Germany in February 1917, followed by the declaration of war in April, there was a sudden, rapid increase in war mobilization. Draft notices were sent out in July 1917, and draftees began reporting to their training bases in September 1917. This led to enormous food, clothing, equipment, and transportation needs. At the same time, many branches of the government, particularly the Army and Navy, were placing large orders and sending out frequently conflicting signals or orders about priorities. The General Munitions Board, set up in April 1916, proved inadequate for the coordination of production and purchases. Severe inflation, totaling 85 percent over the two years prior to July 1917, wrecked havoc with budgets and disrupted the economy.

As a result, in June 1917 Sec. of War Newton D. Baker sent to President Wilson, on behalf of the CND, a request to establish a War Industries Board. In his order launching the WIB, Wilson supported Baruch's vision of searching for a middle path between a laissez-faire approach and tight, legally mandated government control.

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