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Woodrow Wilson and Business-Government Relations During World War I

Published online by Cambridge University Press:  05 August 2009

Robert D. Cuff
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Extract

By the spring of 1914 Woodrow Wilson was clearly doing everything in his power to ingratiate the new Democratic Administration with the nation's business groups. He abandoned the Brandeisian spirit of trust-busting as part of his program for corporation control in favor of regulation by commission, a policy more in line with the sentiment among leading businessmen. (Indeed, the Federal Trade Commission established in 1915 soon showed that it would serve as the friend and not the enemy of business.) He directed personal appeals to businessmen both by letter and by informal conversations at the White House, and he made nominations to regulatory agencies like the Federal Trade Commission and Federal Reserve Board that left no doubt as to his sincerity in attracting business support. One of his choices for the Reserve Board, Thomas D. Jones, was at once a personal friend and a former trustee of Princeton University. But Jones was also a well-known member of the “Zinc Trust” and a director of the International Harvester Company then under indictment as a conspiracy in restraint of trade. Wilson campaigned hard for this appointment against strong Senatorial opposition even within his own party. At the same time, he declared publicly: “It would be particularly unfair to the Democratic Party and the Senate itself to regard it as the enemy of business, big or little.” Wilson was outraged when the Senate Banking Committee rejected his friend. “I believe the judgment and desire of the whole country cry out for a new temper in affairs,” he wrote rather despairingly to Jones. “We have breathed already too long the air of suspicion and distrust.”

Type
Research Article
Information
The Review of Politics , Volume 31 , Issue 3 , July 1969 , pp. 385 - 407
Copyright
Copyright © University of Notre Dame 1969

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References

1 Quoted in Link, Arthur S., Woodrow Wilson and the Progressive Era 1910–1917 (New York, 1963), p. 77Google Scholar.

2 Quoted in ibid., p. 78.

3 Baker, Ray S. and Dodd, William E. (eds.), The Public Papers of Woodrow Wilson (6 vols., New York, 1925–1927), III, 242Google Scholar.

4 Link, , Woodrow Wilson and the Progressive Era, pp. 75–80, 228–229Google Scholar; Link, Arthur S., Wilson: The New Freedom (Princeton, 1956), pp. 446–457, 469–471Google Scholar; Urofsky, Melvin I., “Wilson, Brandeis and the Trust Issue, 1912–1914,” Mid-America, 49 (01, 1967), 3–28Google Scholar; Wiebe, Robert H., Businessmen and Reform: A Study of the Progressive Movement (Cambridge, 1962), pp. 142–151Google Scholar. For business delight with increased prosperity see the Annalist, V (05 17, 1915) 495Google Scholar (June 28, 1915), 672–673, VI (July 26, 1915), 92–93, VII (January 3, 1916), 3; Pope, George, “The Outlook for Manufacturers,” American Industries, XVI (02, 1916), 20–22Google Scholar; Speare, Charles F., “American Business Transformed by the War,” Review of Reviews, 52 (10, 1915), 473–476Google Scholar; Johnson, Alba B., “America's Industries As Affected by the European War,” Annals, LXI (09, 1915), 1–3Google Scholar.

5 At the same time, Wilson was concerned that American entry into the war would bring immense gains to big business. He confided to Secretary of the Navy Josephus Daniels in the latter part of 1916: “… if we enter this war, the great interests which control steel, oil, shipping, munitions factories, mines, will of necessity become dominant factors, and when the war is over our government will be in their hands. We have been trying, and succeeding to a large extent, to unhorse government by privilege. If we go into this great war all we have gained will be lost and neither you nor I will live long enough to see our country wrested from the control of monopoly.” This quotation is cited in Freidel, Frank, Franklin D. Roosevelt, The Apprenticeship (Boston, 1952), pp. 288–289Google Scholar. See also Morrison, Joseph L., Josephus Daniels, The Small-d Democrat (Chapel Hill, 1966), p. 78Google Scholar; and Auerbach, Jerold S., “Woodrow Wilson's Prediction to Frank Cobb: Words Historians Should Doubt Ever Got Spoken,” Journal of American History, LIV (12, 1967), 608–617CrossRefGoogle Scholar, esp. 612. We shall see, however, that the importance of private economic power to the war effort severely limited the President's ability to act on this concern.

6 For a brief description of Coffin's industrial preparedness campaign see Scott, Lloyd N., Naval Consulting Board of the United States (Washington, 1920)Google Scholar, ch. II. For a copy of President Wilson's public statement see Wilson to Daniels, April 17, 1916, Papers of Josephus Daniels (Manuscript Division, Library of Congress).

7 Baruch to Wilson, August 17, 1916, Papers of Woodrow Wilson (Manuscript Division, Library of Congress). See also the New York Times, September 9, 1915. For a description of the role of the military services in the evolution of the Council of National Defense see Hammond, Paul Y., Organizing for Defense the American Military Establishment in the Twentieth Century (Princeton, 1961), pp. 64–71CrossRefGoogle Scholar, 83–84, and Huntington, Samuel P., The Soldier and the State: The Theory and Politics of Civil-Military Relations (Cambridge, 1957), pp. 260–263Google Scholar.

8 The other three members were Samuel Gompers, Dr. Franklin H. Martin, and Dr. Hollis Godfrey. Martin and Godfrey had been active in preparedness movements within the medical and engineering professions, respectively. See Martin, Franklin H., The Joy of Living (2 vols., Garden City, 1933), IIGoogle Scholar; Subcommittee No. 2 (Camps) of the Select Committee on Expenditures in the War Department, War Expenditures, Hearings …, 66th Cong., 1st Sess., Vol. I, Serial 3 (Washington, 1920), 880–883Google Scholar; and Gompers, Samuel, Seventy Years of Life and Labor, an Autobiography (2 vols., New York, 1925), II, 351–352Google Scholar, 360–361.

9 Baruch to Walter Gifford, January 16, 1917, Journal of Bernard M. Baruch, the Papers of Bernard M. Baruch (Princeton University).

10 Testifying before the War Policies Commission some eighteen years later, Commander John Hancock, who in 1917 was Paymaster General of the Navy, commented: “Mr. Baruch's strength in the war lay in the fact, primarily, that he knew where to go to get the right kind of men to do the job. That was the great contribution, I think, he made.” U.S. Congress, Hearings before the Commission Appointed Under the Authority of Public Resolution No. 98, Res. 251, 71st Cong., 2d Sess. (3 Parts, Washington, 1931), I, 153Google Scholar.

11 Baruch to Walter Gifford, January 16, 1917, Journal of Bernard M. Baruch, Baruch Papers. See also the Minutes of the Advisory Commission December 6, 1916, Record Group 62, File 1B-1, Box 25, Records of the National Defense (Federal Records Center, Suiteland, Md.).

12 For a complete list of the committees related to the Council of National Defense as of June, 1917, see the Congressional Record, 65th Cong., 1st Sess., Vol. 55, Part 5, 1916 4661–4679Google Scholar; and the First Annual Report of the Council of National Defense (Washington, 1917), pp. 97–127Google Scholar.

13 Morron to J. Hancock, June 19, 1917, Record Group 61, File 21A-A1, Box 312, Records of the War Industries Board (Federal Records Center).

14 Growell, J. Franklin, Government War Contracts (New York, 1920), pp. 53–54Google Scholar.

15 Congressional Record, 65th Cong. 1st Sess., Vol. 55, Part 5, 4596.

16 Ibid., 4593–4594.

17 Ibid., 4655–4657. See also, New York Times, July 4, 1917.

18 Rosenwald to Wilson, July 2, 1917, Papers of Albert S. Burleson (Manuscript Division, Library of Congress).

19 Wilson to Rosenwald, July 3, 1917, Wilson Papers.

20 Wilson to Burleson, July 3, 1917, ibid.

21 Wilson to Newlands, July 6, 1917, ibid.

22 Wilson to McKellar, July 6, 1917, ibid; New York Times, July 8, 1918. Senator McKellar had no doubt drawn attention to himself as an opponent of the committee network by a lengthy series of questions he addressed to Secretary of War Baker and to the chairman of the Advisory Commission, Daniel Willard, regarding a number of committee practices, particularly the procedures followed in letting contracts. See McKellar to Willard, June 24, 1917, Record Group 62, File 1-A1, Box 1.

23 McKellar to Wilson, July 7, 1917, Wilson Papers. See Reagan, Michael D., “Serving Two Masters: Problems in the Employment of Dollar-a-Year and Without Compensation Personnel” (unpublished Ph.D. dissertation, Princeton University, 1959)Google Scholar for a useful examination of the dilemma raised here by McKellar.

24 Wilson to McKellar, July 9, 1917, Wilson Papers. The italics are the author's.

25 Ibid.

26 McKellar to Wilson, July 11, 1917, Wilson Papers.

27 Wilson to McKellar, July 13, 1917, ibid.

28 Congressional Record, 65th Cong., 1st Sess., Vol. 55, Part 5, 5031. For Newlands' statements in defense of the committee see, ibid., 4596, 5003, and 5042.

29 Ibid., 5035.

30 W. C. Saeger to Pomerene, July 19, 1917, Record Group 61, File 2D-A1, Box 21B; Congressional Record, 65th Cong., 1st Sess., Vol. 55, Part 5, 5218. See ibid., 5042–5047, for a copy of Pomerene's original amendment and the changes of wording made in it.

31 Ibid., 5048–5049.

32 The following Senators were recorded as voting against Section 3: Borah (R., Idaho), Broussard (D., La.), Cummins (R., Iowa), Gore (D., Oklahoma), Gronna (R., North Dakota), Hardwick (D., Ga.), Johnson (R., Prog., Cal.), Kenyon (R., Iowa), La Follette (R., Wis.), McKellar (D., Tenn.), McNary (D., Ore.), Nelson (R., Minn.), Norris (R., Neb.), Ramsdell (D., La.), Shields (D., Tenn.), Sutherland (R., W. Va.), Trammell (D., Fla.). Senator Reed, after voting first in the affirmative, changed his vote to the negative.

33 Minutes of the Meeting of the Council of Defense and Advisory Commission, July 28, 1917, Record Group 62, File 2-B1, Box 104.

34 Vauclain to Boise Penrose, August 15, 1917, Record Group 62, File 1-A1, Box 14.

35 “Congress and the Advisory Commission,” American Machinist, 47 (07 19, 1917), 125Google Scholar.

36 “Private Interest in Government Work,” American Industries, XVIII (08, 1917), 8–9Google Scholar.

37 Ibid. See also, “Regulation That May Hamper Emergency Boards,” Hardware Age, 100 (07 19, 1917), 70–71Google Scholar.

38 Palmer to Wilson, August 15, 1917; Wilson to Jones, August 16, 1917; Jones to Wilson, August 16, 1917, all in the Wilson Papers.

39 Jones to Wilson, August 16, 1917, ibid.

40 Vauclain to Daniel Willard, August 15, 1917, Record Group 62, File 2-A4, Box 82.

41 Baruch to Ambrose Monell, July 7, 1917, Record Group 61, File 21A-A1, Box 13. The New York Tribunereported that some businessmen had not resigned earlier only because to have done so would have seemed to have substantiated the Senate's charges. New York Tribune, July 19, 1917, clippings in Record Group 61, File 21A-A1, Box 3.

42 Meyer, Jr., to Baruch, August 14, 1917, Record Group 61, File 21A-A1, Box 1.

43 Baker to Walter Gifford, August 20, 1917, Record Group 62, File 2-A4, Box 82; Baker to Vauclain, August 22, 1917, Record Group 61, File 21A-A1, Box 1; Wilson to Edgar Palmer, August 23, 1917, Wilson Papers. See also Walter Gifford to Frank Scott, September 4, 1917, Record Group 62, File 2-A4, Box 82.

44 T. W. Gregory to Scott, August 29, 1917, Wilson Papers.

45 Manville to Baruch, September 10, 1917, Record Group 61, File 21AAl, Box 5.

46 Meyer, Jr., to Baruch, September 4, 1917, Record Group 61, File 21AAl, Box 1.

47 Palmer to Wilson, September 20, 1917, Wilson Papers.

48 Minutes of the Council of National Defense and Advisory Commission, September 5, 1917, Record Group 62, File 2-A8, Box 87.

49 See the memo dated September 10, 1917, warning the committee members to declare their business interests, attached to a sample letter dated September 11, 1917, Record Group 61, File 21A-A1, Box 1. For one example of such a declaration of interest see the letters from members of the Petroleum Committee in Record Group 61, File 21A-A1, Box 14. The members of the Brass Committee resigned in a letter to Baruch on September 17, 1917, Record Group 61, File 21A-A1, Box 1.

50 Baruch to Dr. William H. Nichols (chairman of the Committee on Chemicals), November 26, 1917, Record Group 61, File 21A-A1, Box 7.

51 For various statements of this basic argument see the following: Baruch to J. D. Laying (Zinc Committee), September 19, 1917, Record Group 61, File 21A-A1, Box 30; Baruch to J. H. Markham, Jr. (Petroleum Committee), October 1, 1917, Record Group 61, File 21-A1, Box 14; Baruch to Ambrose Monell (Nickel Committee), October 11, 1917, Record Group 61, File 21AAl, Box 13; Baruch to A. V. Davis, September 12, 1917, Record Group 61, File 21A-A1, Box 20; and Baruch to T. Manville (Asbestos and Roofing Committee), September 14, 1917, Group 61, File 21A-A1, Box 5.

52 J. D. Laying to Baruch, September 22, 1917, Record Group 61, File 21A-A1, Box 30.

53 Monell to Baruch, September 12, 1917, Record Group 61, File 21A-A1, Box 13. See Lewis W. Kingsley (Mica Committee) to Baruch, September 12, 1917, Record Group 61, File 21A-A1, Box 13, for another example of this argument.

54 War Service Committee, Chamber of Commerce of the United States, War Service Committee, Plan of Organization, Their Scope and Duties. Found in Record Group 61, File 21A-A4, Box 1573. The Administration made its appeal at the War Convention of the Chamber of Commerce held in Atlantic City in September. See Nation's Business, V (September, 1917), for a comprehensive report of the convention including reprints of the major addresses. As an example of the generally favorable response with which industry greeted the appeal see Tupper, C. A., “The Spirit of Co-Operation,” Cement World (09, 1917), 6–7Google Scholar;“Mobilizing American Industry,” Commercial America, 14 (10, 1917), 11Google Scholar; and the certifications made by the Chamber in Record Group 61, File 1-A2, Box 33. See also, Koistinen, Paul A. C., “The Industrial-Military Complex in Historical Perspective: World War I,” Business History Review, XLI (Winter, 1967), 378–403, esp. 391–394Google Scholar.

55 Minutes of the Meeting of the War Industries Board, November 1, 1917, Record Group 61, File 1-C1, Box 72.

58 Walter Gifford to Baruch, November 9, 1917, Record Group 61, File 21A-A1, Box 1.

57 Baruch to Gifford, November 13, 1917, ibid. See also Baruch to A. C. Bedford, November 24, 1917, Record Group 61, File 21A-A1, Box 14.

58 Baruch to Morron, November 24, 1917, Record Group 61, File 21A-A1, Box 7.

59 Unsigned letter to A. C. Bedford and Members of the Petroleum Committee, December 4, 1917, Record Group 61, File 21A-A1, Box 14.

60 Baruch to Dr. W. H. Nichols, December 5, 1917, Record Group 61, File 21A-A1, Box 7. The former Sub-Committee on Fertilizers, for example, now became the Committee on Fertilizers of the Chemical Alliance Inc. H. B. Bowker to Baruch, December 10, 1917, Record Group 61, File 21A-A1, Box 8. McKellar was sufficiently disillusioned by the ineffectiveness of Section 3 and the formation of the WIB in transforming the old system that he introduced legislation in January, 1918, to take mobilization out of the hands of dollara-year men altogether and give it to fully compensated government employees. New York Times, January 5, 1918; Koistinen, , op. cit., 397–398Google Scholar; Reagan, , op. cit., 16–17Google Scholar.

61 Wilson to McKellar, July 9, 1917, Wilson Papers.

62 Wilson to Herbert Hoover, July 19, 1917, ibid.