■Wednesday, April 21, 1026
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I OPPOSITE NEW HOTEL
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I A Few of the Many Facts
I ABOUT |
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In Training |
W f|i§f|f|r
! Martha Norellus. 17-year-old Mtiatte
Wonder and holder of several worid’s
Vecords. keeps In good condition for
the swimming season by doing a
round or two of golf each day on
the links at White Sulphur Springs,
W. Va. Her father. Charles Norelius,
Scandinavian champion for a num
bar of years, is her trainer He
•iiiunlvi ell her work
Soap Drill.
The kindergarten teacher asked one
of her young pupils what the eyes
were for. and was promptly answered.
“'To see wilii." Another was asked
what the no«e was for, and the nn
| swer was correctly given. Then she
| asked the little daughter of Mr. and
1 Mrs. Paul Watts, "What are your
! cars for?” ,The child replied, ‘To
j keep clean." She got a 100 mark.
1 The largest novel in the world is
| one which was commenced in Japan
in 1X52 and the publication of
which was not finished until 1013.
The novel comprises 100 volumes,
j each containing 1000 pages of more
■ than 300 words each.
THE CONCORD DAILY TRIBUNE
I,' ~ *
Taking the Profit
Out of War
;
By BERNARD M. BARUCH !
Reprinted from The Atlantic Monthly. J
[The February issue of the Atlantic for 192 b carried a paper by ‘
Mr. Sisley Huddleston dealing with the general subject of "taking the
jrroflt out of tear," which Mr. Huddleston called "An American Plan for 1
'Peace” The first-quoted phrase was put into the language of the Wot
Industries Board toward the close of the World War through its efforts
to eliminate all war profits ., Mr. Huddleston’s article came to the atten
tion of Mr. Bernard M. Baruch, chairman of the War Industries Board
and administrator of the nonprofit plan, and (as he writes us), since it
seemed to indicate a growing interest in the idea, induced him to invoke ,
practical means to bring about a full comprehension of taking the profit
out of war in the various great countries of the world. To this end he |
responded to U suggestion of Mr. Owen D. Young, of the Page School of
International Relations at Johns Hopkins University, that he establish
a course of lectures there to expound the War Industries Board plan in
detail. Later he will proceed to make similar arrangements at leading
universities in Great Britain, France, Germany, Italy, and Japan. Agree
ing with Mr. Baruch that the subject calls for public knowledge and
discussion, it was natural for the Atlantic to turn to him for the follow
ing paper. —Tub EditAus os The Mohthlt.]
I
{ War was once described as Prus
sia's most profitable industry.
I It needs only a scant examination
of history to learn that other coun
tries were open to the same indict
ment The methods of the Robber
Barons did not pass with the end
of feudalism. Annexation by con
quest did not cease. But when
America entered the World War
President Wilson fathered a doc
trine that shall always govern us —
that never a foot of territory would
be added to our boundaries by
force.
So, as America has taken the
lead toward making impossible na
, tional profit through war, It too
may be America’s privilege to point
the way toward making impossible
Individual profit through war. To
take the profit out of war is to
- take a long step toward creating an
i economic detestation of war. The
experience of the United States in
1 the World War affords a basis for
the belief that the plan herein dis
cussed is practical. In fact. It is
| more than a belief—it is a cer
tainty, although not widely known.
The world is such a busy place,
and the radius of human activity
; has been so greatly enlarged be
cause of modern inventions, that
: It is not strange that there are but
. few people who are conversant
. with what was quietly but effec
‘ tively taking place In this country
in the mobilization and use of its
material resources In the World
War—a, process that would have
eveptup|ly eliminated all improper
profits. !,
Strength is given to the public
advocacy of Industrial mobilization
made by both President Harding
and President Coolidge—Mr. Cool-
Idge as recently as last October In
his Omaha speech to the American
Legion—by the fact that the plan
they advocated as a part of the
regular national war agencies had
once been set up and successfully
operated under the War Industries
Board.
Preceding the President’s recent
clear exposition of this subject,
some degree of public interest had
been engendered by an exchange
of letters between Owen D. Young
(of Dawes plan fame), in behalf
of the Walter Hines Page School of
International Relations, and the
writer. The correspondence result
ed in the establishment of lectures
at the Page School (of Johns Hop
kins University) on this theme.
Previously the Atlantic Monthly
' printed an article by Sisley Hud
dleston, who pointed out that
Europe saw great strides toward
peace in the American idea of
"taking the profit out of war” in a
systematic way. His basic refer
ence was to the plan of the War
Industries Board.
The resources of a country might
be referred to as the five M’s (1)
man power; (2) money; (3) main
tenance of food; (4) material re
sources (Including raw materials,
manufacturing facilities, transpor
i tation, fuel and power); and (5)
morale. The intelligence with
which the first four are directed
and co-ordinated as a whole will
determine the fifth, the morale of j
the community.
In the war emergency it, early
became evident to those who were
charged with the responsibility of
mobilising the resources that there
was a Just sentiment Among the
people against profiteering. Profi
teering might be willful and profit
making might be Involuntary; but.
Whatever Its form, there wag a just
determination it should cease. So
It became necessary to fix prices
where the supply was limited.
Wherever the government creat
ed a shortage by its demands,
, prices were fixed, not only for the
Army, Navy and the Allies, but for
the civilian population as well.
And in addition to price fixing on
war essentials (such as steel, wool,
copper, and so forth), the balance,
after the war program had been
filled, was rationed or distributed
according to the priority needs of
the various civilian demands. In
other words, where the price of the
product of an industry was fixed
that industry had to deliver the
part which the government did not
need to the civilian population, not
in the way the industry chose, but
aa the government directed.
It must be remembered that
when the war came there was no
adequate preparation. Indeed, it la
doubted by the best authorities
whether any effective form of
preparation than known would
have been of much avail in view )
of the widespread and engulfing
results of the war and the lack of
knowledge of the various instru- i
ments of destruction which were
being devised and which it became i
necessary to combat.
Our own Army had several di
visions competing one with another
foq materials, transportation, hous
ing, and so forth. On top of that
there prevailed the demands of the
Shipping Board, with the slogan
that ships would win the war, anil
of the Food Administration, with
the slogan that food would win the
war. Further, there was the Rail
road Administration with its need
for material and labor, and finally
there was the feverish quest for
labor and supplies on the part of
the munitions makers—all compet
ing for labor, money, materials,
transportation, fuel, power, and
each insisting on the greater impor
tance of its activity. All this while
the labor supply was being lessened
by the flow of men into the Army.
While an endeavor was being
made to bring order out of chaos,
the great undertaking had to go on.
Men, ships, munitions, food, ma
terial, had to be provided. Old
organizations, bureaus and tradi
tions had to be met and changed,
but not destroyed until the new
was set up. The wonder of it all
is, not that there were so many
mistakes, but that so much was
accomplished.
i . At the time we entered the war
prices were at their peak, and tend
ing higher because of the war’s in
satiable demands. The problem
was not alone to secure the ma
terials and labor and to stop the
confusion, but to do it In such a
way that the morale of the people
would be maintained. The prices
of some things, like steel and cop
per, were fixed far below prevailing
rates, and the wages of labor In
those industries were standardized.
The more highly organized an In
dustpr, the easier It was to arrange.
Order did not commence to appear
until the Army tunneled Its needs
through one man sitting with a sec
tion of the War Industries Board
and until the Navy, Shipping
Board, Allies and Railroad Admin
istrations did likewise. Each de
partment satisfied its requirements
through a central authoritative
body. This was called the War
Industries Board, controlling and
directing all materials and co
ordinating through its chairman
the whole system of governmental
and civilian supply and demand.
It was created by executive order
In March of the year 1918.
Briefly, this board endeavored to
mobilize the industries of America
so that the fighting forces of the
Allied and associated nations could
I raw from the United States—the
last reservoir of men, materials
and money—the things needed for
the winning of the war at the time
the things were needed and with
the least dislocation of Industry
and the least disturbance of the
iivllian population. ,
1 11
) The War Industries Board was
organized like any other super
visory committee, with a chairman,
vice chairman, members in charge
at various activities, burean chiefs
and subordinate workers. It sur
veyed and sought to arrange the
whole industrial war field under
the plenary powers conferred by
the President and the Congress.
How well It did thie is a story for
athers (o tell. What it did is the
badirfiof‘tbtel jflinj lam here draw
ing.
It was comparatively easy to fix
prices and to distribute materials,
and indeed to stabilize the wages
at labor in those Industries in
which prices were fixed. The labor
situation, however, became increas
ingly difficult, particularly when
General Crowder found it neces
sary to withdraw men tot the pro
posed campaign of 1919 after 4.-
900,000 soldiers had already been
taken. ,
Much has been said about the
profiteering of labor. It is an un
just accusation. It is only fair to
say that this condition was pri
marily brought about through the
inexperience of the organization
within our own governmental de
partments and by the furious bld
i ting of munitions makers and ship
bonders for services. That situ*'
tion, together with the increased
prices of the things that labor had
to buy with the results of its work,
made It inevitable that labor must
get higher wages.
So it became evident that the
price fixing program had to go even
further, and the War Industries
Board, when the Armistice came,
was proceeding with a campaign to
fix the prices of all the basic
things that labor had to buy. Some
had previously' been fixed. I speak
of labor In a much broader sense
than manual labor, for the unor
ganized so-called "white collar”
part of our community—clerks,
teachers, government employees,
professional men—were less able
to meet the situation than labor
in the narrower sense. For- the
protection and relief of such
groups certain plans were devised.
| To Illustrate—
One of them provided that manu
facturers, Jobbers and retailers of
shoes could make and sell shoes
only of a specified quality at a fixed
price, effective July, 1919. No one
who did not have a card of the
War Industries Board in his win
dow could sell shoes, and only the
! standardized shoes could be sold.
No Jobber or manufacturer would
sell shoes to anybody who did not ■
have this card. The shoes were
! to be stamped Class A, B or C and
had to be of the quality prescribed
and sold at the price fixed. The
j country was so organized In every
district that there could be im
| mediately reported to Washington
the name of any shoe retailer who
did not carry out the regulations of
the War Industries Board as to
price and quality. Through restric
tions on his labor, money, raw
materials and transportation no
manufacturer would have been per
mitted to sell to any dealer violat
ing the regulations. The Armistice
stopped the execution of this plan.
Another plan of this nature: The
manufacturers of men’s and wo
men’s wearing apparel had in 1918
been called to Washington, to
gether with the retailers of various
goods, and notified that regulations
would have to be made in regard
to retail prices and standardiza
tion of clothing.
The rulings by the board were .
made known through the Issuance I
of official bulletins at irregular in-!
tervals and were widely distributed
by the press, which co-operated In
this most necessary work with a
whole-hearted purpose that gave to
the orders of the War Industries
Board the instant and broad dr;
culatlon they required.
Mr. Hoover already was doing
much to perfect his control of food
products and prices. There was
also talk of fixing rents, and In
some cities this was done.
If we were to start, In the event
of another war, at the place where
we were Industrially when the I
World War ended, the President, I
acting through an agency similar
to the War Industries Board, would
have the right to fix prices of all
things as of a date previous to the |
declaration of war when there was
a fair peace time relationship
among the various activities of the
nation. It would be Illegal to buy.
Bell, serve or rent at any other than
these prices. Brakes would be ap
plied to every agency of Inflation
before the hurtful process started.
An Intelligent control of the flow
of men, money and materials
would be imposed, Instead of har
ing the blind panic heretofore en
suing on the first appearance of
the frantic demands of war. The
Draft Board would have before It
the rulings of the priority commit
tee, together with the estimated
needs of every business and pro
fession In its relationship to the
conduct of the war, and men would
be selected accordingly. The Draft
Board could more Intelligently de
cide, with the advice of the priority
committee, many of the problems
with which it would be faced.
There would be no sending of men
to the trenches who were needed
(or expert industrial war work and
then bringing them back again.
Businesses not necessary to the
winning of the war would be cur
tailed. The Draft Board would
have that Information before it
The prices of all things being
fixed, the price fixing committee
would make any necessary adjust
ments, as was done during the war.
Under the system used in 1918
these prices were made public and
adjusted every three months, so
that any consumer or producer had
his day in court when he consid
ered prices unfair. Those who
complained that during the war
prices were too high had this
ready recourse to hand. «
In the meantime all the Indus
tries of the country would have
been mobilized by the formation
of committees representative of
each industry, as was done In the
World War. Over them would be
placed a government director or
commodity chief. The various gov
ernment departments would ap
point committees representing their
requirements, so that on one com
mittee the resources of the nation
would be represented and on the
other the demands of the govern
ment The government director
would stand between to decide, in
conjunction with the priority com
mittee, to what department sup
plies should go.
Money would be controlled sad
directed like any other resource.
"Taking the profit out of war” is
not synonymous with “conscrip
tion of wealth,” as it is sometimes
regarded. The latter is a theoreti
cal project, prohibited by our Con
stltution, contrary to the spirit of
our Social and political institutions.
<*nd impossible In practice. Tak
ing the profit out et war is an or
derl> and scientific development of
the economics and conduct of mod
ern war, necessary to the effective
mobilization of national resources
ana indispensable to equalizing the
burdens of war among the armed
and civilian population. Born of
experience and proved by practice,
it removes some of the most de
structive concomitants of modern
war —the contusion and waste inci
dent to war time inflation.
This term “conscription of
wealth,” used by so many, has
created a hope among those of
socialistic tendencies, and a fear
among those who, like me, believe
in our system based upon personal
initiative and reward, of a taking
of money, without payment, for the
use of State. Neither the hope nor
the fear is Justified by the recom- i
mendatlon herein contained or by |
our experience in the war. The ■
use of money should be controlled
and directed in a national emer
gency. A man should no more be
permitted to use his money as he
wißhes than he should be permitted
to use the production of his mine,
mill or factory except through the
general supervising agency. This
was being done toward the end of
the war.
During the final phase of the
World War no man or corporation
or Institution could raise money
without the approval of the Capi
tal Issues Committee of the Treas-!
ury Department, which committee j
In turn would not permit the bor- |
rowing of money unless the War 1
Industries Board approved the use I
to which It was to be put. Thus
the City of New York was not oer- 1
mitted to spend 88,000,000 for the
building of schools. The City of
Philadelphia was prevented from
making Improvements that in
peace time would have been neces
sary, bnt In war time were not
Various states, counties and cities,;
and a vast nnmber of private con
cerns, were denied the use of
money and materials for purposes
not necessary for the winning of
the war. Each part of the com
munity had to adjust Its wants to
the whole great undertaking.
i m
I There have been a great many
bills Introduced Into Congress on
the subject of Industrial mobilisa
tion, some sponsored by great or
ganizations like the American
Legion, and others by newspapers
and publicists. But it is surprising
| how little knowledge there was on
the part of those who drew np the
bills of the practicability and feasi
bility of so mobilizing our re
sources that It would be Impossi
ble to make as much profit in war
: as in time of peace. Take into
consideration the tact that the fol
| lowing things were being done in
I 1918:
General Crowder, who was in
charge of the draft, had asked the
chairman of the War Industries
> I Board where he could obtain addl
- tional men needed for the Army in
i France with the least possible dls
i location of the war making lndus
, trial civilian machinery,. and we
were in the process of replacing
- male labor with women. By a sys
tem of priorities the Board wp I
allocating to our own Army and !
’ Navy, to the Allies and to the ee
i sentlal war Industries the things
' they required. It was making
priority rulings as to transporta
■ tlon, and they were being followed
| out by the Railroad Administrator.
; The Fual, Administrator distributed
- fuel only on the rulings of the War
! Industries Board. The board was
- engaged in disentangling and rp
), moving the many conflicts and
I I competitive efforts Involved In la
i bor and buildings that had previ
■ ously occurred because of lack of
’ any co-ordinating agency. It was
i allocating power and making regn
- latlons for the hitching np of scat
i tered nnlts of power. It was
I changing munitions orders from
I congested to less congested die
■ tricts. It had actually carried into
> effect an order that no building in
-! volving $2,500 or more could ba
II undertaken without the approval
lof the War Industries Board. No
! steel, no oement, no material of
• any kind could be used tor any
- i purpose whatsoever unless the War
-1 Industries Board permitted It. No
I, steel company oould sell over five
I tons of steel unless approved by
I I the Director of Steel. The Treas
> ury would not permit the raising
■ of money for any industrial or fl
• nancial operation unless it was
1 approved by die War Industries
■ Board. The President issued an
order that no commandeering
• should be done by the Army,
• Navy, Shipping Board or Food Ad
> ministration without the approval
1 of the chairman of the War Indua
> tries Board. Every raw material
> industry, and indeed practically
r every industry in the country, was
- organized through appointment
►, of committees, and none of these
r industries would do any business
-■ except onder the rulings promul
i gated by the Board. Standardl
i satlon in every was
i- rapidly proceeding. These rulings
r were made known through the la
i suance of official bulletins at lr
• regular intervals and were dis
-1 tributed by the press. We were
I endeavoring to arrange it so that
I the fighting forces were to receive
• those things which they needed
i end no more, so that whatever was
• not actually required at tha front
• was left to civilian purposes. In
- dustrtes were curtailed, but never
| destroyed; skeletonised, but never
PAGE THREE
killed. Indeed, the use of men ™
money and materials was rapidly
being brought Into exactly that i,
condition which I have previously
stated to be necessary In case of
another war. , - ti
If, in addition to this, the Presi
dent In the future has the author
lty to fix prices and distribution of
materials and labor, rent, and the "
use of hi an power, transportation,
fuel and all the things necessary ,j
for the conduct of the war, any
rise In prices will be prevented, >
oven In anticipation of war There n
are many who claim that war Is
caused primarily by the desire of •>
profit. lam not one of those But
If there Is an/thing in this conten-
tion this plan wi'l remove the pos- 1
siblllty of anybody urging war rs
a means of making profits. Even
if there are no men who desire war
aa a means of making profit, the
fact that profits would be less in
i war than In peace, and wealth and
resources would be directed by the :t
■ government, might have some ac
tive deterring Influence on men ol
great resources. Instead of being
passive, they might become active
advocates of peace
There are many people who are,
for various reasons, afraid to dis
cuss the subject during peace time
and prefer to wait for war. There
are also some great manufacturers
who oppose any such plan because
they were seriously interfered
with during the war time. Indeed,
it has been the experience of some .
of those responsible for the indus
: trial mobilization In the World War ,
j to remain the objects of venomous
| attack begun during the time that
1 the necessities of the nation made
I It Imperative to control activities
and profits. Some critics were prom
i lnent manufacturers who said:
“Tell us what the government
wants and we will fill the orders,
but don’t Interfere with the sale of
(he part of our product that the gov
ernment does not want to use.”
That was unthinkable. President
I Wilson decreed that fair prices for
the government were fair prices
for civilians. I must say, however,
that the vast majority of American
manufacturers rose to the situation
In such a splendid way as to bring
the following commendation from
Woodrow Wileon: “They turned -e
aside from every private Interest 4
of their own and devoted the whole
of their train capacity to the tasks
that supplied the sinews of the
whole great undertaking. The" J
patriotism, the unselfishness, the
thorough going devotion and dis
tinguished capacity that marked
their toilsome labors day after
day, month after month, have made
them fit mates and comrades to the
men in the trenches and on the
seas.”
There are many men who are
afraid that the adoption of this
plap by (jjongress would give aa .
impetus to socialism or commun
ism or sovietism or whatever they
may call if, because, they say, “It
you show it can be done in war
time there will be a demand that
it be done In peace time.” It can
not be done in peace time. Thpre
can be no great undertaking with- -
put a strong moving cause. In
peace time the moving cause is
personal initiative and payment for
services performed. The substitute
for that in war time is the common '
danger.
| The War Industries Board was
the foremost advocate of price fix
ing and distribution, and it bad
great power in this field, but when
the Armistice came It recognized
that peace conditions were being
restored, and it was the first to .
change the war time order of
things and to leave to the people
themselves the readjustment of
their affairs. I am satisfied that it
Is Impossible for the government
to do In peace time what I am ad*
vocatlng, although it becomes ab.
solutely necessary in order to
conduct a modern war successfully
and to conduct it on a non-profit
eering basis.
The application of this plan, be
sides making the nation a coherent
| unit in time of war, would Impress
upon every class in society a sense
of .Its own responsibility In such
event. If It were known that this
universal responsibility would be
1 enforced, no class—social, finan
■ cial or Industrial—could fall to
understand that in case of war it
’ j would have to bear Its share of the
1 , burdens Involved and would have
1 to make sacrifices of profit, con
’ j venience and personal liberty coi;
’ relatively with those made by the
! soldiers in the field. To this
■ extent the plan would act as a
1 positive deterrent to any hasty re
-1 course to force in an international
■ controversy.
One thing that has definitely
- come from the war is the neces
sity of arranging affairs so that a
1 portion of the population shall not
be sent to the front to bear all the
physical hardships and thslr con
sequences while others are left be
hind to profit by their absence. It
applied at the outbreak, the War
Industries Board (as it was fumS
tionlng at the close of the World
War) would prevent this and les
sen, If not remove, the social and
economic evils that corns as the. ..
aftermath of war.
i A red blanket fell into a circus
water trough and stained the watef
, red. From this it is said came the
i first pink lemonade which became os
| popular with circuses.
“Why, they've made a mess of my—
’ sewing-room,” explained his wife.
“Needles, reels of cotton, scissors-3-
1 everything has been hidden away in
the most unexpected places. It's
exasperating.”