1907 - 1911

Larry Abraham, Call It Conspiracy (Seattle: Double A Publications, 1985)

[Note: I choose quotations from this source to summarize these early events because it condenses the material so well. The same facts can be found in William Greider’s Secrets of the Temple (New York: Simon and Schuster, 1987) and G. Edward Griffin, The Creature from Jekyll Island; A Second Look at the Federal Reserve 3rd ed. (Westlake Village: American Media, 1998)

By the turn of the century J.P. Morgan was already an old hand at creating artificial panics. Such affairs were well coordinated. Senator Robert Owen, a co-author of the Federal Reserve Act (who later deeply regretted his role), testified before a Congressional Committee that the bank he owned received from the National Banker’s Association what came to be known as the “Panic Circular of 1893.” It stated: “You will at once retire one -third of your circulation and call in one-half of your loans ....” [ House Banking and Currency Committee Hearings on H.R. 7230, 75th Congress, March 2 and 19, 1938, p. 214)

Historian Frederick Lewis Allen tells in Life magazine of April 25, 1949, of Morgan’s role in spreading rumors about the insolvency of the Knickerbocker Bank and the Trust Company of America, which rumors trigered the 1907 Panic. In answer to the question: “Did Morgan precipitate the panic?” Allen reports: “Oakleigh Thorne, the president of a particular trust company, testified later before a congressional committee that his banks had been subjected to only moderate withdrawals... that he had not applied for help, and that it was the [Morgans’] ‘sore point’ statement alone that had caused the run on his bank. From this testimony, plus the disciplinary measures taken by the Clearing House against the Heinze, Morse and Thomas banks, plus other fragments of supposedly pertinent evidence, certain chroniclers have arrived at the ingenious conclusion that the Morgan interests took advantage of the unsettled conditions during the autumn of 1907 to precipitate the panic, guiding it shrewdly as it progressed so that it would kill off rival banks and consolidate the preeminence of the banks within the Morgan orbit.

The “panic” which Morgan had reated, he proceeded to end almost single-handedly. He had made his point. Frederick Allen explains: “The lesson of the Panic of 1907 was clear, though not for some six years was it destined to be embodied in legislation: the United States gravely needed a central banking system. ...”

The man who was to play the most significant part in providing America with that central bank was Paul Warburg, who along with his brother Felix had immigrated to the United States form Germany in 1902. They left brother Max (later a major financier of the Russian Revolution) at home in Frankfurt to run the family bank (M.N. Warburg & Company).

Paul Warburg married Nina Loeb, daughter of Solomon Loeb of Kuhn, Loeb and Company, America’s most powerful international banking firm. Brother Felix married Frieda Schiff, daughter of Jacob Schiff, the ruling power behind Kuhn, Loeb. Stephen Birmingham writes in his authoritative Our Crowd: “In the eighteenth century the Schiffs and Rothschilds shared a double house: in Frankfurt. Schiff reportedly bought his partnership in Kuhn, Loeb with Rothschild money.

Both Paul and Felix Warburg became partners in Kuhn, Loeb and Company. In 1907, the year of the Morgan-precipitated panic, Paul Warburg began spending almost all his time writing and lecturing on the need for “bank reform.” Kuhn, Loeb and Company was sufficiently public spirited about the matter to keep him on salary at $500,000 per year while for the next six years he donated his time to “the public good.” Working with Warburg in promoting this “banking reform” was Nelson Aldrich, known as “Morgan’s floor broker in the Senate.” Aldrich’s daughter Abby married John D. Rockefeller Jr. (The current Governor of New York [ at the time of this writing, Nelson Aldrich Rockefeller] is named for his maternal grandfather.)

After the Panic of 1907, Aldrich was appointed by the Senate to head the National Monetary Commission. Although he had no technical knowledge of banking, Aldrich and his entourage spent nearly two years and $300,000 of taxpayers’ money being wined and dined by owners of Europe’s central banks as they toured the Continent “studying” central banking. When the Commission returned from its luxurious junket it held no meetings and made no report for nearly two years. But Senator Aldrich was busy “arranging” things. Together with Paul Warburg and other international bankers, he staged one of the most important secret meetings in the history of the United States. Rockefeller agent Frank Vanderlip admitted many years later in this memoirs: “Despite my views about the value to society of great publicity for the affairs of corporations, there was an occasion, near the close of 1910, when I was as secretive - indeed as furtive - as any conspirator. ... I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System. [Vanderlip, Frank, “Farm Boy to Financier,” Saturday Evening Post, February 9, 1935, p. 25]

The secrecy was well warrented. At stake was control over the entire economy. Senator Aldrich had issued confidential invitations to Henry P. Davidson of J.P. Morgan & Company; Frank A. Vanderlip, President of the Rockefeller-owned National City Bank; A. Piatt Andrew, Assistant Secretary of the Treasury; Benjamin Strong of Morgan’s Bankers Trust Company; and Paul Warburg. They were all to accompany him to Jekyll Island, Georgia, to write the final recommendations of the National Monetary Commission report.

At Jekyll Island, writes B.C. Forbes in his Men Who Are Making America: “After a general discussion it was decided to draw up certain broad principles on which all could agree. Every member of the group voted for a central bank as being the ideal cornerstone for any banking system.”

Warburg stressed that the name “central bank” must be avoided at all costs. It was decided to promote the scheme as a “regional reserve” system with four (later twelve) branches in different sections of the country. Those present knew that the New York bank would dominate the rest, which would be marble “white elephants” to deceive the public.

Out of the Jekyll Island meeting came the completion of the Monetary Commission Report and the Aldrich Bill. Warburg had proposed the bill be designated the “Federal Reserve System,” but Aldrich insisted his own name was already associated in the public’s mind with banking reform and that it would arouse suspicion if a bill were introduced which did not bear his name. However, Aldrich’s name attacked to the bill proved to be the kiss of death, since any law bearing his name was so obviously a project of the international bankers.

When the Aldrich Bill could not be pushed through Congress, a new strategy had to be devised. The Republican Party was too closely connected with Wall Street. The only hope for a central bank was to disguise it and have it put through by the Democrats as a measure to strip Wall Street of its power. The opportunity to do this came with the approach of the 1912 Presidential election. Republican President William Howard Taft, who had turned against the Aldrich Bill, seemed a sure-fire bet for re-election, until Taft’s predecessor, fellow Republican Teddy Roosevelt, agreed to run on the ticket of the Progressive Party.

August Hecksher, Woodrow Wilson; A Biography (New York: Charles Scribner’s Sons, 1991)

P. 238-239 On July 20, 1911, the New York press announced the opening of Wilson headquarters at 42 Broadway. McCombs in an interview indicated that a nationwide drive would be organized, based on the support of Princeton alumni. Wilson was unhappy with the publicity and told a reporter that there was in effect “no campaign.” The office would merely take care of answering mail and disseminating information. But that summer and fall two figures entered the Wilson circle, far more serious in what they implied for his political fortunes than the establishment of any campaign headquarters. The first was a tall, hatchet-faced Tennesseean who had come to New York to make his way as a businessman. William Gibbs McAdoo was no ordinary businessman, however. ...

[ The 1954 edition of the Encyclopedia Americana, vol. 18, p. 4: McAdoo, William Gibbs, American cabinet officer: b. near Mariett, Ga., 31 Oct. 1863 ... Decended from a distinguished Southern family, ... Was educated at the University of Tennessee, admitted to the bar in 1885 ... practiced law in Chattanooga till 1992, when he came to New York and opened a law office. In 1898 he formed a law partnership with Mr. William McAdoo (...no relation) who in 1910-1930 was chief city magistrate, and had been assistant secretary of the Treasury under President Cleveland. The partnership was disolved in 1903. ......... In 1902 he organized the Hudson and Manhattan Railroad Companuy and raised 4 million dollars to connect New York City with New Jersey by tunneling under the Hudson River. ... McAdoo’s company completed the project; the first tunnel being completed on March 8, 1904, and three more being finished in the next five years ... McAdoo also began participating in activities of the Democratic Party, and supported Woodrow Wilson in the 1910 gubernatorial campaign in New Jersey. He became vice chairman of the Democratic National Committee in 1912 and following Wilson’s election to the presidency became secretary of the Treasury, March 6, 1913. ]

Heckscher, cont., p. 238-239: He [McAdoo] met Wilson at Princeton in 1909, and the two got on well from the start. Wilson counted on him for practical advice, and by the summer of 1911 he was rivaling McCombs for first place in the direction of the embryonic, undeclared campaign. McAdoo was cool while McCombs was subject to wild swings of mood; unshakable where McCombs was easily discouraged; discreet where McCombs was talkative. Above all McAdoo was ambitious for both Wilson and himself. This strangely compounded man would play a leading role in the Wilson administration, dreaming of being his successor. More astonishing, given McAdoo’s age (he was only seven years younger than Wilson), he became Wilson’s son-in-law. The second recruit was very different from McAdoo and even more important in

the long run. In that autumn of 1911 a wealthy Texan was staying at the Gotham Hotel in

New York, a pause in the trek that took him annually from his home in Austin to the watering places of Europe. Edward Mandell House had always been interested in politics, as a behind-the-scenes participant but not as a candidate. ...as he noted in an unpublished autobiography, “my ambition has been so great that it has never seemed to me worth while to try to satisfy it.” A successful businessman, he kept an office which he rarely visited, preferring to have the important men of his day in Texas - the politicians, lawyers, editors, educators - come to talk with him on the shaded verandah of his spacious home. .....

Colonel House had stood aloof from the [William Jennings] Bryan [populist Democrat] movement, awaiting the day when he could play a prominent part in nominating a Democratic candidate more to his liking. In 1910 .... he began to consider the rising star of Woodrow Wilson. A meeting of the two was arranged at his hotel in mid-November 1911. They talked for an hour. The Colonel decided Wilson was the man to serve. “Never before have I found both the man and the opportunity,” he noted shortly afterwards, and added, with what could only be described with a condescending air, “I think he is going to be a man we can advise with some degree of satisfaction.”

@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@

1912

Bernard M. Baruch, The Public Years (New York: Pocket Books, 1962) Original edition: (New York: Holt, Rinehart, 1960)

p. 5 This was my first convention and I enjoyed the show hugely. Like all conventions, it was an exhausting carnival of sense and nonsense, and like all conventions it had its special touch of drama. In this case the drama lay in the drive to nominate Woodrow Wilson, led by the amateurs Billy McCombs and the tall, explosive, voluble William Gibbs McAdoo. They were the fighting professionals, including the well-organized forces of Congressman Oscar Underwood of Alabama and Congressman Champ Clark of Missouri, the leading contenders for the nomination.

In spite of the maneuvering, however, it soon became clear that one man was the key figure in the convention. Thrice defeated for the Presidency, William Jennings Bryan, in a black alpaca coat, sat with his Nebraska delegation, cooling himself with a palm-leaf fan, aware of everything and waiting for his moment. The Nebraska delegation was pleged to Champ Clark, but everyone knew that the Great Commoner was against the coalition of party bosses and Wall Street financiers who supported Clark and who, according to Bryan, had been having their way in the party and expected to go on having it.

The high point of the convention drama for me, as it was for everyone in the hot and smoky hall, came when Bryan rose to denounce, as of old, the high priests of finance. Charles Hyde, New York City’s Chamberlain and one of Gaynor’s aides, had gotten me a seat behind the rostrum. From that vantage point I heard again the mighty voice pouring out the oratory that was more in the style of my father’s day than in the manner of the new century. Bryan was absolutely uncompromising. The Democratic Party must not nominate any candidate “of the privilege-hunting and favor-seeking class,” by whom he meant such as J.B. Morgan, August Belmont, and Thomas Fortune Ryan. I could not see Ryan where he sat in the Virginai delegation, and I wondered how he was taking it. But then I saw him stand up, stretch his long, thin neck, and raise his head in a proud, defiant gesture. Here was a man who had been my good friend and business associate in Wall Street; but now in this political world, so different from the business world I knew well, I heard him being characterized as someone with whom no decent person would be allied.

There is no doubt how the delegates took it. They hooted, howled, moaned, threatened to lynch Bryan, fought in the aisles, and waved fists in his face. Through it all Bryan thundred on, unperturbed, until at last he came back to the platform, retrieved his palm-leaf fan, mopped his brow, and by chance sat down beside me. “There, that’ll fix ‘em,” I overheard him say.

It did indeed, “fix ‘em.” Bryan’s forces refused to give their vote to Clark. As the ballotting went on, Clark’s strength steadily melted away and Wilson’s grew...... At last, on the forty-sixth ballot, Wilson went over the top. The amateurs had triumphed; Wilson was the nominee. Utterly weary and impatient to be off, the delegates perfuctiorily nominated Thomas Marshall of Indiana for the Vice-President as a reward to Tom Taggart, the first of the state bosses to switch from Clark to Wilson. Then the convention adjourned.

.....For the first time I had gotten a good close look at a unique political institution - the nominating convention. .... I have attended many since then, and for me the truly amazing thing about them is that despite the circus side show and carnival aspects, despite the second-rate men who at times are selected, so many first-rate, even great men are chose.

<><><><><><><><><><><><><><><><><><><><>

Larry Abraham, Call It Conspiracy (Seattle: Double A Publications, 1985)

p. 54-55

The Democratic candidate, Woodrow Wilson, was equally the property of Morgan. Dr. Gabriel Kolko in his The Triumph of Conservatism, reports: “In late 1907 he [Wilson] supported the Aldrich Bill on banking, and was full of praise for Morgan’s role in American society.” According to Lundbert: For nearly twenty years before his nomination Woodrow Wilson had moved in the shadow of Wall Street.”

Woodrow Wilson and Teddy Roosevelt proceeded to whistle-stop the country trying to out-do each other in florid (and hypocritical) denunciations of the Wall Street “money trust” - the same group of Insiders which was financing the campaigns of both. Dr. Kolko goes on to tell us that ,at the begining of 1912, banking reform “seemed a dead issue. ... The banking reform movement had neatly isolated itslef.” Wilson resurrected the issue and promised the country a money system free from domination by the international bankers of Wall Street. Moreover, the Democrat platform expressly stated: “We are opposed to the Aldrich plan for a central bank.” But the “Big Boys” knew who they had bought. Among the international financiers who contributed heavily to the Wilson campaign, in addition to those already named, were Jacob Schiff, Bernard Baruch, Henry Morgenthau, Thomas Fortune Ryan, and New York Times pulbisher Adolph Ochs.

The Insider’s sheepdog who controlled Wilson and guided the [central bank] program through Congress was the mysteious “Colonel” Edward Mandel House, the Britisheducated son of a representative of England’s financial interests in the American South. The title was honorary; House never served in the military. He was strictly a behind-thescenes wire-puller and is regarded by many historians as the real President of the United States during the Wilson years. House authored a book, Philip Drew: Administrator, in which he wrote of establishing “Socialism as dreamed by Karl Marx.” As steps toward his goal, House, both in his book and in real life, called for passage of an income tax and a central bank providing “a flexible currency.” ....

In his The Intimate Papers of Colonol House, Professor Charles Seymour refers to the “Colonel” as the “unseen guardian angel” of the Federal Reserve Act. Seymour’s work contains numerous documents and records showing constant contact between House and Paul Warburg while the Federal Reserve Act was being prepared and steered through Congress. Biographer George Viereck [ Viereck, George S., The Strangest Friendship in History (New York: Liveright, 1932)]

<><><><><><><><><><><><><><><><><>

Alexander L George & Juliette L. George, Woodrow Wilson and Colonel House: A Personal Study, 2nd ed. (New York: Dover Publications, Inc., 1964)

p. 75 Edward Mandell House was born in Houston, Texas, on July 26, 1858. He was the seventh son of one of the wealthiest men in Texas.

Thomas Willima House’s fortune derived from vast sugar and cotton plantations and banking. Too, during the Civil War, he owned ships which, running the Union blockade both ways, plied between Galveston and nearby West Indian and Central American ports. The cargo from Galveston was usually cotton. The cargo on the return voyage was munitions, clothing and medicine, which Thomas House sold to the Confederate army. Blockade-running was a risky enterprise, but a highly profitable one.

P. 85 [In his political life, before meeting Wilson, Colonel House] assiduously abvoided the official recognition which could have been his at any time during his [political] service in Texas.

With each successful campaign, his stature both in Texas and in the national Democratic Party grew, and so did his desire to move on to the larger stage of national affairs. The difficulty was that during these years and for a decade afterwards, as well (with the interruption in 1904), the Democratic Party in the United States was dominated by William Jennings Bryan.

Bryan’s ideas about currency seemed to House unsound. He did not think that Bryan could be elected President, that his election would be a desirable think for the country, or - and this was a crucial consideration - that Bryan would be amenable to his advice. Writing of Bryan, House declared: “I do not believe that any one ever succeeded in changing his mind upon any subject that he had dtermined upon ... I believe he feels that his ideas are God-given and ar not susceptible to the mutability of those of the ordinary human being.”

By 1896, House was eager to participate in a national election, and the national leaders of the Democratic Party were eager to have him do so. However, he remained aloof from the campaign because Bryan was the Democratic presidential nominee. Bryan lost the election to McKinley.

In 1900, Bryan was nominated once again. By this time, House and the “Peerless Leader” were on cordial personal terms, having been next-door neighbors in Austin during the winter of 1898-99. Close personal association with Bryan only confirmed House’s assessment of the man and his potentialities. He found him “as wildly impracticable as ever.” Once more he declined invitations to participate in the presidential campaign. Bryan lost again to McKinley.

p. 93 At four o’clock on the afternoon of Novermber 24, 1911, Governor Wilson called on Colonel House at the Hotel Gotham in New York City.

The two men liked each other immediately. “We talked and talked. We knew each other for congenial souls at the very beginning,” House later recalled. The conversation was wide-ranging and “we agreed about everything. That was a wonderful talk. The hour flew away ... Each of us started to ask the other when he would be free for another meeting, and laughing over our mutual enthusiasm, we arranged an evening several days later when Governor Wilson should and have dinner with me.” The second meeting according to House was even more delightful. There was time for a more detailed exchange of views. “It was remarkable. We found ourselves in agreement upon practically every one of the issues of the day. I never met a man whose thought ran so identically with mine ... I cannot tell you how pleased I was with him. He seemed too good to be true.”

The Governor called on House several times that winter, and the initial rapport between them was strengthened. House later wrote: “We found ourselves in such complete sympathy, in so many ways, that we soon learned to know what each was thinking without either having expressed himself. “A few weeks after we met and after we had exchanged confidences with men usually do not exchange except after years of friendship, I asked him if he realized that we had only known one another for so short a time. He replied, “My dear friend, we have known one another always. And I think this is true.”

The day after his first meeting with Wilson , House wrote his brother-in-law, Sidney Mezes:

“We had a perfectly bully time. ... He is not the biggest man I have ever met, but he is one of the pleasantest and I would rather play with him than any prospective candidate I have seen ... It is just such a chance as I have always wanted, for never before have I found both the man and the opportunity.

@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@

1913

@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@

1914

August Hecksher, Woodrow Wilson; A Biography (New York: Charles Scribner’s Sons, 1991)

p. 336-339 For Woodrow Wilson, sitting at the bedside of his daying wife, the war came not entirely as a bolt from the blue. From his London post, Ambassador Walter Hines Page had perceptively analyzed the European scene. The Anglo-German rivalry made war seem inevitable, he wrote the President, except in those moments when he “shared the feelings of most men that perhaps the terrible modern engines of destruction would not, at the last moment, cause every nation to desist.” Colonel House had been abroad that spring of 1914 on his first fact-finding mission for the President. .. There was bound to be and “awful cataclysm,” he wrote: “whenever England consents, France and Russia will close in on Germany.” ...

The war’s outbreak brought many problems that Wilson, under the burden of bereavement, could leave to the initiative of his aides. The Secretary of State [Bryan] dealt with the situation of American citizens stranded in Europe; the Secretary of the Treasury, with the mood of panic in the financial markets. But on the great issue, defining and establishing of America’s political and moral position, he acted alone. That strict neutrality was essential he never doubted.

.....

So now in the concept of neutrality, a course essentially negative and expedient, he perceived ideal implications for his own country and for a world at war.

.....

To the President and his colleagues it became quickly apparent that neutrality was not merely a posture or a state of mind, but a policy to be defined, a series of measures to be worked out. Was it, for example, within the law and spirit of neutrality to permit private bankers to make loans to belligerent powers? Bryan, convinced that it was not, argued his case so forcibly that for a brief while Wilson went along with him. Under pressure from McAdoo and Houston he then reversed himself. To sell submarines to Britain was plainly unneutral; but did that apply to submarine parts, or to submarines manufactured in sections? After consideration, the President’s decision was that it did not.

@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@

1915

Hansen W. Baldwin, World War I; An Outline History (New York: Harper & Row, 1962)

p. 57 Winston Churchill, First Lord of the Admiralty, had asked on Christmas Eve, 1914: “Are there not other alternatives than sending our armies to chew barbed wire in Flanders?” Lord Fisher, the firery First Sea Lord, who had been recalled at seventy-four to replace Prince Louis of Battenberg, also favored “eccentric strategy,” though his eyes were chiefly on the Baltic.

The concept of forcing the Dardanelles grew in many minds, but Churchill was its most persistent and prominent advocate. The promised rewards were immense: the outflanking of the Central Powers’ interior postion; the establishment of a secure supply line via the Black Sea to Russia; virtual elimination of Turkey from the war; the establihsment of a Balkin front; help to Serbia; perhaps collapse of Austria-Hungary. “The possession of the Dardanelles would have been the richest prise in the world for the Allies. . . Admiral von Tirpitz (German naval minister) stated in 1915, that should the Dardanelles fall, then the World War has been decided against us.”

Such immense possibilities deserved careful planning and tremendous coordinated effort.

...

A combined amphibious operation was discussed - and though the concept was never wholly abandoned - it was shelved temporarily to permit the navy to try to force a passage.

P. 60 On March 18, a grand assault was made and almost - but not quite - the thing was done. Before 2 P.M. the Turkish fire slackened and nearly died; the gunners were demoralized, some of the guns had been wrecked, communications destroyed, fire control impaired, ammunition nearly expended, less than thirty armor-piercing shells remained. But with startling reversal fate deserted the English; in quick succession the old French battleship Bouvet was sunk by a mine; Inflexible struck another mine, and Irresistible still another. Later, Ocean was fatally damaged by mine and shell fire. Irristible and Ocean were abandoned in sinking condition in the face of the enemuy, as the British withdrew. March 18, from grand beginning, drew on to puling end, and it was now the army’s turn. A British expeditionary force, hastily assembled, numbered initially about 78,000 men; its backbone, the Anzac (Austrailian-New Zealand) Corps. They were opposed by the newly constituted Turkish Fifth Army (astride the straits) of about 84,000 men, under von Sanders. General Sir Ian Hamilton, an elusive “British poet-general,” commanded the Allied expeditionary force.

P. 61-62 It was to drag on for months, but the first few days determined the campaign’s end. The beachheads, commanded by dominating enemy heights, were fire-swept; the outflanking operation intended to bypass the stalemate of the Western Front bogged down in trench warfare. Both sides attacked again and again, with minor gains but major losses. As the hot Mediterranean summer came on, the invaders began to go down with sickness: malaria and dysentery more than decimated the ranks. A Turkish destroyer torpedoed and sank the British battleship Goliath on the night of May 12-13, and a German U-boat torpedoed the Triumph and sank the Majestic. The Daredanelles were becoming an open, seeping wound.

But the British had the bull by the tail; they reinforced defeat and sent three more divisions to Hamilton. The Turks, too, built up; the Turkish Fifth Army numbered thirteen divisions by August when the British Army tried again. The August attacks, with a new landing at Suvla Bay, took place from August 6-10, but the objective - the dominating massif of Sari Bair, which the Anzacs had tried to reach in April - was still denied to the Allies. The rest was aftermath and predicament: how to face defeat and let go of the bull.

In September, one French and two British divisions were shifted to Salonika; in October Hamilton was recalled and relieved by General Charles Monro. But it was not until November 23, with casualties from enemy fire and inexorable nature steadily mounting, that evacuation was decided upon after Lord Kitchener had visited Gallipoli. The evacuation began, in phases, in December, and despite tremendous anticipated losses it was successfully completed by January 8-9, 1916. The evacuation, ironically, was more brilliantly conducted by the British than any other phase of the campaign. But no matter how the cake was sliced, it was a great defeat, “the worst British defeat between Saratoga and Singapore.” Some 489,000 Allied soldiers were engaged; 252,000 were casualties. Of half a million Turks, 251,000 were killed, wounded or missing, died of disease, or were evacuated sick. Gallipoli was a maker and breaker of men and reputations: Kitchener’s impeccable fame was tarnished, Lord Fisher resigned in May, Churchill was out soon afterward, Hamilton was done soldiering forever, except for memoirs and memories. But Mustafa Kamal’s star was on the rise; he was hailed as the “Savior of Gallipoli.” .....

P. 72. Nineteen-fifteen was a year of flowing blood and small comfort for the Allies. In Britain, the star of Lloyd George was rising; Herbert Asquith formed a coalition cabinet; Churchill went off to fight in the trenches. Russia suffered her greatest casualties of the war - perhaps two million killed and wounded; another 1,300,000 in German prison pens. Serbia was overrun; the Salonika expedition locked up in what Berlin scornfully called “their largest internment camp.”

The Central Powers had established a secure fortress, a central position with continuous communications and lines of supply from one partner to another. Gallipoli had been a disaster. The Western Front, after more than two million casualties, was still in stalemate . Townshend was beseiged in the blowzy Arab town named Kut that few Englishmen had ever heard of. And the submarine was ravaging the shippoing lanes. It had been a year of missed opportunities and increasing hatred; slowly the comprehension of the meaning of Total War was dawning on the world.

@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@

1916

John S. D. Eisenhower, Yanks; The Epic Story of the American Army in World

War I (New York: The Free Press, 2001) p. 299

Planning for mobilization of American industry began gradually starting early in 1916, after the sinking of the Lusitania. At that time the Naval Consulting Board was set up for the Navy and the Kernan Board for the Army. These boards made extensive survey of American industry; the Naval Consulting Board alone surveyed eighteen thousand industrial plants. American industrial leaders, while cooperative, were determined that the needs of war should not be allowed to shut out civilian consumption. The answer therefore, was a partnership between government and industry.

Still a sense of urgency was lacking. The Army Appropriation Act of 1916, which set up the Council of National Defense, did so in the form of a rider to another act, not a main provision. Nevertheless the council did come into existence. It consisted of six cabinet officers who were directed to advise with the Commission of Industrialists. The needs of industry were respected, of course, but the nation’s needs came first; even the industrialists appointed to the committee were named by the President.

<><><><><><><><><><><><><><>

August Hecksher, Woodrow Wilson; A Biography (New York: Charles Scribner’s Sons, 1991)

p. 397 A more mundane matter of business [than Senate Judiciary Committee backing and full Senate approval of Brandeis as Supreme Court justice] had to be settled before [the 1916 Presidential election] campaign got under way, the question of party chairmanship. McCombs [the pre-McAdoo, pre-House Wilsonian progressive truebeliever] had remained in the post, ineffectual, ill in body and mind; and it was the nightmare of Wilson’s supporters that he should resist efforts to replace him. Wilson was convinced of his lack of fitness, but still hesitated to break with a man who had been one of his first political sponsors. A young Wilson supporter and admirer, a debonair financier who had recently come to Washington and was beginning to make his mark as a Democratic loyalist and a man of princely entertainments, Bernard M. Baruch, was assigned the task of managing McComb’s withdrawal. Baruch passed his first test well. In late April McCombs assured the President that he would quietly give way to a successor. He had been got rid of, House remarked jubilantly, “for all time.”

Hansen W. Baldwin, World War I; An Outline History (New York: Harper & Row, 1962)

p. 94-96 The year 1916 started with severe Allied reverses in the outer theaters of the war. The Gallipoli evacuation was completed in January; on April 29, Townshend, besieged since early December, 1915 in Kut al Imara in Mesopotamia by Turkish and Arab forces, surrendered. Some 10,000 men - mostly of the Indian Army, but including more than 2,000 Englishmen - were taken prisoner; 1,700 others had died, 2,500 had been wounded during the five-month siege. It had been an epic of defeat; the men, decimated by disease, had been on short rations for weeks, but as always in defeats, there had been mismanagement, poor leadership, little strategic vision. And the epic was tarnished by a last-minute attempt by the British government to raise the siege by attempts to relieve Kut, which started in January under General Fenton Aylmer and continued through April under General George Gorringe, cost the British almost 22,000 casualties - double the strength of the Kut garrison.

For most of the rest of 1916, Mesopotamia was quiescent, as the British built up their strength and their supplies. In August a general named Sir Stanley Maude assumed comand, and at last man and opportunity had met. In December just before the rains came, he started once again - with a superiority over the Turks of more than two to one - a drive to the north toward the magic city of Baghdad.

...........

Meanwhile inthe Suez Canal-Palestine area, raid and counterraid, buildup and construction featured most of 1916. General Archibald Murry assumed command in Egypt in March, 1916; the maximum force there of fourteen divisions was rapidly reduced, however, to four. The British, toiling with intensity, had built another fortified area near the canal, a strategic answer and a needlessly expensive one to the Turkish attack on the canal in 1915. Then, painstakingly, the British forces started to clear the Sinai peninsula of the enemy, a task which had to be preceded and accompanied by immense logistic efforts, including the laying of water pipelines, and the construction of a railway and a road.

But the Germans and Turks were not dismayed. In the caldron of the desert summer, Kress von Kressenstein led 15,000 Turks and Germans across Sinai to Romani near the seacoast. Murray fought a skillful battle (August 3-4) and repulsed the enemy handily, but the Turks made good their retreat.

An Arab revolt against the Turks began in June in Saudi Arabia; on June 9 the Arabs captured Mecca and in September, Taif.

By years end, the British had crossed the shifting sands of Sinai, complete with their pipeline, railroad, and the road , and had taken El Arish, evacuated by the Turks, and on December 23, Magdhaba, with most of its 1,300-man garrison. The British defense of the Suez Canal now stood on its “natural” frontiers - at the eastern boearders of the Sinai peninsula.

@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@

1914-1916

. "In March, 1915, the J.P. Morgan interests, the steel, shipbuilding, and powder interest, and their subsidiary organizations, got together 12 men high up in the newspaper world and employed them to select the most influential newspapers in the United States and sufficient number of them to control generally the policy of the daily press....They found it was only necessary to purchase the control of 25 of the greatest papers. "An agreement was reached; the policy of the papers was bought, to be paid for by the month; an editor was furnished for each paper to properly supervise and edit information regarding the questions of preparedness, militarism, financial policies, and other things of national and international nature considered vital to the interests of the purchasers."

- U.S. Congressman Oscar Callaway, 1917

***********************

H. W. Brands, Woodrow Wilson (New York: Henry Holt and Company, 2003) p. 52-71

...When the fighting began, Wilson declared American neutrality

Yet, Wilson couldn't leave things at that. He felt obliged to elaborate, to explain that the neutrality he envisioned was not the narrow neutrality of international law but a higher neutrality of the spirit. "The people of the United States are drawn from many nations, and chiefly from the nations now at war," he told the country. "It is natural and inevitable that there should be the utmost variety of sympathy and desire among them with regard to the issues and circumstances of the conflict. Some will wish one nation, others another, to succeed in the momentous struggle. It will be easy to excite passion and difficult to allay it." ... "I venture, therefore, my fellow countrymen, to speak a solemn word of warning to you aginst that deepest, most subtle, most essential breach of neutrality, which may spring out of partisanship, out of apssionately taking sides. The United States must be neutral in fact as well as in name during these days that are to try men's souls. We must be impartial in thought as well as in action, must put a curb upon our sentiments as well as upon every transaction that might be construed as a preference of one party to the struggle before another."

...

... the belligerents outlasted the war's first winter, and neither side evinced any imminent need to quit. ... as the casualties mounted, the killed and maimed became arguments not for peace but for fighting on to victory, however distant that might be.

Another reason for the war's surprising duration directly involved the United States. The shjort-war scenario had been based on the belief that when the belligerents ran out of money they would have to put down their emptly guns. In the past this principle had generally held true. But the recent emergence of the United States as an economic power allowed the competing war ministries to hope for American help, in the form of American money. If dollars could be coaxed across the Atlantic, the belligerents might fight on past the time their own resources ran dry.

The French were the first to pursue this strategy. Indeed, the war wasn't a month old before Paris approached J.P. Morgan and Company about selling French bonds in the United States. The Morgan men were tickled at the prospect of the business but decided to check with the State Department to determine whether bonds for belligerents comported with the administration's definition of American national interest.

William Jennings Bryan thought not -- emphatically not. Besides being a populist, and on that ground disinclined to do any favors for the Morgans of the world, the secretary of state was a pacifist. He believed that war was no inevitable aspect of international affairs but the result of specific sins on the part of powerful men. Among the sinners were those who aimed to batten on the misfortunes of war: the arms merchants and their underwriters. International law allowed trade between neutrals and belligerents but barred certain goods as contraband. Bryan now argued to Wilson that the categoy of contraband ought to include money. "Money," Bryan argued, "is the worst of all contrabands because it commands everything else." And leaving aside the question of morality -- which is to say, complicity in butchery -- allowing the loans would endanger American neutrality. The bondholders and their agents would employ their influence to ensure the survival of their debtors. "This influence would make it all the more difficult for us to maintain neutrality," Bryan said, "as our action on various questions that would arise would affect one side or the other, and powerful financial intersts would be thrown into the balance." By contrast, for the United States to deny the loans would have a decidedly pacifying effect. "We are the one great nation which is not involved, and our refusal to loan to any belligerent would naturally tend to hasten a conclusion of the war."

Wilson intitially let himself be persuaded by Bryan's argument and approved a ban on loans to the belligerents. But the belligerents -- the French in particular -- persisted. They applied for credits to be used strictly to purchase American goods. They contended that if trade with the belligerents was legal and proper, was the Wilson administration agreed it was, then credits to facilitate that trade were legal and proper too. Moreover, as credits were a customary means of doing business, to withold them on account of the war might actually be considered unneutral.

Wilson chose to accept this argument even while sticking with the larger ban on regular loans. Yet the distinction proved impossible to maintain. Dollars were dollars whether spent on American goods or something else. In addition, an ineluctable dynamic of trade soon set in. The American economy was in recession when the war began, but the war orders from Europe quickly reeled in the slack and set American industry and agriculture humming. The credits kept the humming at an encouraging pitch -- and much as Bryan predicted, created important constituencies for whatever measures might be necessary to sustain the good times.

By the summer of 1915 it was apparent that these measures included outright loans. Britain and France were financially wracked; only a massive infusion of American money could keep them going. And their collapse, should that occur, would be America's economic disaster. "If the European countries cannot find means to pay for the excess of goods sold to them over those purchased from them, they will have to stop buying and our present export trade will shrink proportionately," wrote Robert Lansing of the State Department, who disagreed with Bryan on the loan question. "THe result would be restriction of outputs, industrial depression, idle capital and idle labor, numerous failures, financial demoralization, and general unrest and suffering among the laboring classes."

It was a sobering prospect, especially for a president who hoped to be reelected in little over a year. Judging that his responsibility to America included ministering to the nation's economic health, Wilson quietly withdrew his objections to belligerent loans. In the interests of continued American neutrality, he made clear that both sides might borrow money in the United States.

Both sides might, but both sides didn't, at least not anywhere near equally. From the start, American loans to the Allied Powers greatly outstripped those to the Central Powers; eventually the ratio reached ten to one. In part the difference owed to the closer ties between American banks and their British and French counterparts, as compared to German and Austrian banks; but to a much larger degree it reflected the pattern of wartime trade.

As soon as the war began, each side apptempted to blockade the other. The Allies had better luck, as a result of Britain's formidable fleet and the general difficulty of maritime access to Germany and Austria. In consequence, while American trade with Britain and France grew rapidly under the spur of the war, American trade with Germany withered.

This wasn't how things were supposed to happen, at least not from the American point of view. As a neutral, the United States should have been free to trade with both sides equally. Although traditional conceptions of contraband would have allowed blockaders to stop shipments of guns and ammunition, other articles of trade should have passed unimpeded.

But the British, who as invertate blockaders, had rarely respected neutral trading rights, showed no desire to start now. They were determined to strangle Germany, and if that required violating the rights of Americans and other neutrals, they were prepared to do so. They defined contraband so broadly as to include almost anything that might support troops in the field, including food. They habitually halted American ships, boarded and searched them, and forced them into British or French ports, where their cargoes were impounded. It was all done in a very civilized manner; no one got hurt, and the owners received their ships back and were typically paid for the confiscated cargoes.

...

On May 7, 1915, a German submarine sank the British liner Lusitania in the Irish Sea. Nearly 1,200 persons perished, including 128 Americans. The shock of the mass killing was scarcely mitigated by reports (which turned out to be true) that the Lusitania was covertly carrying munitions, nor by a recently renewed warning from Germany about passenger travel in the war zone.

...

While he was formulating his official reaction, he traveled to Philadelphia to address a group of newly naturalized citizens. There he tested an idea he evidently had been pondering for some time. "Americans must have a consciousness different from the consciousness of every other nation in the world," he said. "The example of America must be the example, not merely of peace because it will not fight, but of peace because peace is the healing and elevating influence of the world, and strife is not. There is such a thing as a man being too proud to fight. There is such a thing as a nation being so right that it does not need to convince others by force that it is right."

For once WIlson's words betrayed him. What did it mean for a nation to be "too proud to fight" when 128 of its people lay dead on the ocean floor? Even the many Americans who still hoped to keep their country clear of the war wondered whether this president was up to the job.

Wilson himself realized he had misspoken. "I have a bad habit of thinking out loud," he confessed to a friend the day after his too-proud-to-fight speech. ...

... Dismissing the idea that the Lusitania's cargo in any way mitigated the crime of its sinking, Wilson dispatched a note to Berlin declaring, "THe principle fact is that a great steamer, primarily and chiefly a conveyance for passengers, and carrying more than a thousand souls who had no part or lot in the conduct of the war, was torpedoed and sunk without so much as a challenge or a warning, and that men, women, and children were sent to their death in circumstances unparalleled in modern warfare." ... "The Government of the United States is contending for something much greater than mere rights of property or privileges of commerce. It is contending for nothing less high and sacred than the rights of humanity." Accordingly, Wilson insisted that Germany change its submarine policy and give assurances that such attacks would not recur.

Berlin mumbled in reply, citing the complexities of submarine warfare and the extenuating circumstances of British malfeasance. Wilson rejected the response as "very unsatisfactory" and sharpened the American position. "Illegal and inhuman acts, however justifiable they may be thoguth to be against an enemy who is believed to have acted in contravention of law and humanity, are manifestly indefensible when they deprive neutrals of the acknowledged rights, particularly when they violate the right to life itself" For Germany to persist in the policies that led to the Lusitania sinking would constitute an "unpardonable offense" against American sovereignty; another such action would be construed as "deliberately unfriendly" to the United States.

This strong wording came at a price to Wilson: the loss of Bryan, who opposed the stern policy to the end. WIlson tried to mollify him. I hope that you realize how hard it goes with me to differ with you in judgment about such grave matters as we are now handling," he told Bryan. "You always have such weight of reason, as well as such high motives, behind what you urge that it is with deep misgiving that I turn from what you press upon me."

But Bryan would not be mollified. He reiterated that the president's message cast American neutrality into serious doubt; he also complained that Wilson paid less heed to him, the secretary of state, than to House, a private citizen. "Colonel House," Bryan told Wilson in what amounted to his exit interview, "has been secretary of state, not I, and I have never had your full confidence."

This was true enough, but it wouldn't help Wilson for it to become public knowledge at this delicate moment. When Bryan formally submitted his letter of resignation, Wilsion replied in rather ungracious language. "My feeling about your retirement from the Secretaryship of State goes much deeper than regret," he wrote. "I sincerely deplore it." And well he might have, for even as he moved closer to war with Germany, Bryan's defection gave the antiwar elements in the country a tested champion.

---

Wilson had married in 1885. His wife was the former Ellen Axson, the daughter of a Presbyterian minister of Rome, Georgia, where Wilson had relatives. For twenty-nine years after their wedding, Woodrow and Wllen Wilson's marriage proceeded fruitfully -- they had three children, all daughters -- but unremarkably. He confided his hopes and dreams to Ellen, and loved her dearly ... She supported his turn from academics to politics, and she was pleased to become his First Lady in 1913. But during the intitial year of his presidency she developed kidney disease, which was complicated by a bad fall. She declined rapidly during the summer of 1914 and died on August 6.

...

Wilson remained depressed for months, through the end of 1914 and into the following year. His work would distract him for a time, but then he would slip back into his despair. When finally snapped him out of it was not any insight into the meaning of life and death but a pretty face and an attractive figure. One afternoon in February 1915, as he and Dr. Graysen were riding down Connecticut Avenue, Grayson waved at a woman on the sidewalk. "Who was that beautiful lady?" the president inquired.

She was Edith Bolling Galt, an aquaintance of Grayson's and the widow of a man whose family owned Washington's poshest jewlery store. In the seven years since his death, she had aquired control of the business, which provided her a comfortable independent living and entree to the most exclusive salons of the capital city. She lived in a house near Dupont Circle, from which she ventured forthy by foot and automobile. Driving her own car, she prided herself on being the first Washington woman to indulge such daring.

Out of no disrespect for the memory of Ellen -- only six months dead -- but rather out of concern for the president's emotional health, Grayson arranged an introduction. Wilson found Edith enchanting. A Virginian like himself, she listened avidly while he read poetry to her, discussed affairs of state, and made the small talk that marks the smitten. In April she sat in the presidential box while Wilson threw out the pitch that opened the Washington Senators' home season.

Wilson had been distracted by Ellen's death, but the entry of Edith into his life sent him into a tizzy. He saw her whenever he could, and wrote her when he couldn't -- often two or three times a day. Not even the most pressing public business kept him from his reveries about Edith; if anything, it was the other way around. After his faux pas in the Lusitania crisis, when he talked of being too proud to fight, he explained to Edith that it was the result of a meeting they'd had the day before. "I do not know just what I said at Philadelphia (as I rode along the street in the dusk I found myself a little confused as to whether I was in Philadelphia or New York!) because my heart was in such whirl from that wonderful interview of yesterday and the poignant appeal and sweetness of the little note you left with me." As Bryan was preparing to leave the cabinet, Wilson seemed at least as worried about the arrival of a houseguest at Edith's whose presence would inhibit the intimacy of their moments together. And during the days when he was drafting and dispatching his Lusitania ultimatum to Germany, he put far more of himself into his letters to Edith.

...

Edith was flattered by the attention--and by access to the inner workings of power. She was fascinated by what Wilson told her of his political and diplomatic affairs, and her fascination caused him to tell her more. He sent copies of government correspondence to her house, for her examiniation. After some initial diffidence, she began offering advice. She didn't like [William Jennings] Bryan, and when he left the administration she was positively gleeful. "Hurrah! old Bryan is out!" she wrote Wilson. "I could shout and sing that at last the world will know just what he is."

Not surprisingly, the unexpected emergence of this newcomer at Wilson's side occasioned concern among the president's associates, every one of whom faced demotion by at least a notch. ... When Wilson mentioned marriage, some of his advisers sought to postpone it till after the 1916 election, lest voters take amiss the rush to remarriage. But once Edith consented, Wilson wouldn't hear of delay. In October 1915 the White House announced the engagement; in December the small wedding was held at Edith's home. ... the end of the honeymoon marked the beginning of Wilson's campaign for a second term. ... Indeed, so interested was Edith in presidential affairs that he would have felt he was letting her down had he not run. And he was still sufficiently infatuated that he would have done nearly anything not to let her down.

Although domestic issues -- especially the New Freedom -- demanded voters' attention in 1916 campaign, from the outset it was apparent that the European war, and America's relation to it, would have much to do with whether Wilson won reelection. And despite genuine outrage that had followed the Lusitania sinking,m it was obvious that the American people wanted to stay clear of war. So did Wilson, even as some of his advisers, particularly House and the new Secretary of State Robert Lansing, were growing convinced that the United States would have to join the fighting. ...

...

But Wilson had reasons for temporizing. From the standpoint of diplomacy, he had yet to be convinced that was was either inevitable or necessary; from the standpoint of politics, he had no desire to compaign on a war platform until voters were thoroughly ready for war. ...

...

...His campaign theme was "He kept us out of war," and it sufficed to keep Wilson in the White House." ...

----------------

Robert H. Ferrell, Woodrow Wilson and World War I (New York: Harper & Row, 1985) p 102-103

Before April 1917, political leaders and military officers had contemplated industrial mobilization, but it had seemed to theoretical to take seriously. ... The Preparedness movement beginning in 1915 was mostly preparedness for the presidential election the next year. In Washington the Navy Department [Assistant Secretary of the Navy Franklin D. Roosevelt --DE] brought together a Consulting Board of scientists including Thomas A. Edison, Howard E. Coffin, vice president of the Hudson Motor Car Company, became a member of the Edison board and arranged for a public relations man, Grosvenor B. Clarkson, to distribute inventory forms to discover the country's industrial resources. Owners of 30,000 plants returned the forms. Many did not. In August 1916, Congress created the Council of National Defense, a Cabinet committee, with and Advisory Commission of prominent citizens working without pay: Coffin, Bernard Baruch; president of the Drexel Institute of Philadelphia, Hollis Godfrey; president of the Baltimore and Ohio Railroad, Daniel Willard; president of Sears, Roebuck, Julius Rosenwald; president of the American Federation of Labor, Samuel Gompers; secretary-general of the American College of Surgeons, Dr. Franklin H. Martin. The commission met in December of 1916 and appointed as its director a statistician of the American Telephone and Telegraph Company, Walter S. Gifford.

@@@@@@@@@@@@@@@@@@

1917

Matthew Josephson, The President Makers; The Culture of Politics and Leadership in an Age of Enlightenment 1896-1919 (New York: Harcourt, Brace and Company, 1940)

p. 534-535 Edward Houise had once observed to Wilson that he thought him too sensitive, too intelligent, and too refined to conduct a war. But Wilson disclosed an unexpected side of his nature when he held himself deaf to all appeals against official injustice during the war. The time comes, he would often say, when one must shut his mind and act.

.....

Although he did not find it necessary to call together a coalition cabinet, embracing leaders of both major parties - holding that this would only hamper and embarrass his efforts - the President did summon the leading financiers, industrialists, administrators, and “best” minds to join in directing the hugely expanded action of the war government. These manned the Council of National Defense and its chief subdivisions, the War Industries Board, the National Food Commission and Fuel Commission, the shippling and railroad boeards, and the War Labor Board. Centralized control and integration of our industries and economic resources, under a President who had championed liberal doctrines, was carried out to an extent never before known here, though under conditions which in most cases richly favored their private owners. The railroads passed (temporarily) into government hands, in March, 1918. In other vital industries production schedules and consumption were controlled, prices were fixed, usually at a very high level, by agreements with the “Dollar-Year’ men who directed the government’s control boards.

The machinery of planning and control assumed a collectivist form, and after a period of preliminary confusion, worked with incredible energy under men like B. M. Baruch, Chairman of the War Industries Board, Herbert Hoover of the Food Commission, Secretary McAdoo, and Daniel Willard of the Railroad Administration, Edward Hurley, Charles M. Schwab, and James Farrell of the Shipping Board, and Dwight Morrow and Thomas W. Lamont, who were detailed to held the Treasury in its huge wartime fiscal operations. Wilson supported his administration “experts” as he supported the army and navy officers he had placed in command. But neither in the military field nor on the economic front at home did his leadership assume any distinctive form, either by striking errors or triumphs of personal command. A collective war machine, patterned after those built up in England as well as in germany, functioned impersonally, sometimes with strange effects. The President would be called in to determine points of policy as they arose; but his main interest lay elsewhere, one might say, beyond the war operations themselves.

<><><><><><><><><><><><>

John S. D. Eisenhower, Yanks; The Epic Story of the American Army in World War I (New York: The Free Press, 2001) pp.299-

The Council of National Defense wielded almost no power, however, and it was soon succeeded by other, subordinate boards, the most notable of which was the General Munitions Board, set up just before the United States declaration of war. The success of the General Munitions Board, was largely due to the efforts of its chairman, Frank A. Scott, president of a company manufacturing high-grade machine tools for both the Army and the Navy. .....

These preliminary preparations, though a great step forward, proved inadequate to prevent confusion among both the government and industry when war actually came. Much of the problem lay in the old bugaboo, the independent bureaus, which conducted purchasing independently despite progress made in bringing them under the authority of all the chief of staff. No fewer than five (later 9) separate authorities were all bidding against one another. In addition to the Navy, other customers for war-related products included the Shipping Board, the Rialroad Administration, and the Red Cross, among many others.

The solution to the probelm would have to come from a cooperative effort, and to administer the sharing, President Wilson looked to a forty-seven-year-old native of South Carolina, Bernard M. Baruch, much as he looked to George Creel to mobilize public opinion. Baruch and Wilson had been friends for some time. Both were progressives, ambitious men, and Southerners. To Wilson, Baruch combined two ideal qualities: he was a Democrat who was also a Wall Street financier. Since early summer of 1916, Baruch had already been participating in an advisory capacity and by the spring of 1917 he enlisted a group of former business contacts to administer raw material purchases for the military. Soon he was appointed as Commissioner for Raw Materials in the newly formed War Industries Board. The coordination of war purchasing may have evolved slowly, but it was handled with remarkable success. All boards and authorities operated with the power of the President behind them, which included the power of commandeering. They established a Priorities System, a Price-Fixing System, and a Conservation System. So effective was the effort that twelve years later, General Hugh Johnson [ future New Deal NRA leader, and attacker of Long and Coughlin -DE], the officer so closely associated with it , could rhapsodize in a memo to General Pershing:

“Whole strata of industry were integrated for the first time in our history. Competition was adjourned. Industries learned to operate in vast units. Patents and trade secrets were pooled. Hostility was erased and cooperation was institutied. ...... Cooperation with Government - so suspiciously regarded in the pre-war era - became commonplace.”

Hugh Johnson was an advocate, but he was also an expert. He took great pride in declaring that the American war effort more nearly reached president Wilson’s ideal of an “entire nation armed” than did that of any other belligerent nation, Germany included. In the accomplishments he described, however, there was one serious caveat. The full power of America’s industrial mo