that grew out of the earlier commercial economy board of the Council of National Defense worked with the commodities sections and the trades concerned to get a fair distribution of the materials left after meeting the war demands. A Resources and Conversion Section was created in May, to reorganize the industries not directly engaged in a war production and make them useful. It divided the United States into twenty districts where regional advisers and local war resources committees applied the principles of the War Industries Board to local affairs. A Facilities Division created in August brought representatives of all departments of Government together to coördinate their work in the new construction needed for war purposes, while a NonWar Construction Section formed at the same time brought all building in the United States to a stop, unless definitely approved by the War Industries Board. War Fi nance Corporation The resources of the United States were strained in every direction by the needs of war. The demand for capital to be lent directly to the Government in the form of Liberty bonds was matched by a demand from war industry for its commercial credits. The supply of available capital was limited, and in January, 1918, voluntary capital issues committees were formed in each of the federal reserve districts to do in the field of finance what the conservation and priorities divisions were doing for industry. The capital issues committees discouraged the use of credit for purposes not connected with the war. They were directly legalized by an act of Congress in April, which at the same time authorized the Treasury Department to create a War Finance Corporation with a capital stock of $500,000,000, Government-owned, with power to sell bonds in order to raise more capital, and with authority to lend these funds to banks to cover loans made by the latter for the benefit of war industries. The Government grip, tightening on industry and finance, was tightened on trade as well. Final steps Pittman were taken in February to bring all foreign trade Silver Act! under license from the War Trade Board. The Shipping Board, in conjunction with the other boards, undertook with new seriousness the study of allocation and conservation of tonnage, and of essential needs for imports and exports. Shipping in American harbors was brought under the autocratic control of their Shipping Control Committee; divisions of planning and statistics were formed to look into the future in an attempt to have supplies ready when the demand for them should come. The ancient silver question took on a new aspect when the Oriental demand for silver bullion raised the price until it neared $1.2929 at which price it would resume the old ratio of sixteen to one to gold. The Pittman Act of April 23, 1918, authorized the replacement of the silver dollars and certificates by federal reserve bank notes, and the sale of the silver bullion to be used in the Far East to stiffen the exchange rate. When the price of silver a little later arose above the ratio of sixteen to one, there was little silver left in circulation to be hoarded because of its superior value. The development of the war machine brought great new powers into the hands of men of affairs. Baruch was supreme in the field of war industries. On April 16 the President commandeered the services of Charles M. Schwab as Director-General of the Emergency Fleet Corporation. A few days later John D. Ryan was brought into the War Department to reorganize and inspire aircraft production. George W. Goethals at the same time became the chief reliance of the War Department in the fields of purchase, storage, and traffic. War Department reorganization A reorganization of the War Department and of the General Staff had been continuous throughout the war. The selection of a staff for Pershing in 1917 left the Washington offices, already undermanned, with few officers available for staff service. The absence of Major-General Hugh L. Scott on the Russian mission deprived the Department of the advice of a Chief of Staff. When General Scott was retired in September, his understudy, Major-General Tasker H. Bliss, succeeded him, but was soon sent to the Paris Con General ference with Colonel House. The preparations for training and outfitting the armies and the performance at wholesale of tasks that no officer in the regular army had ever been allowed to anticipate led to continuous error and improvement. While the advocates of a Munitions Ministry were demanding a change in the conduct of the war, the War Department itself was reorganizing its services and concentrating in single offices ali of the similar services heretofore exercised independently in each division of the army. General Goethals became Chief of a Storage and Traffic Service in December; Edward R. Stettinius was made Surveyor-General of Purchases in January. In April the Division of Purchase, Storage, and Storage, and Traffic combined these two establishments under Goethals, and brought War Department methods into harmony with those of the War Industries Board, while Stettinius became an assistant Secretary of War; specializing in matters of purchase and supply, and was sent to Paris in the summer to represent the United States on the Inter-Allied Munitions Council. Goethals, Division of Purchase, Traffic The internal structure of the General Staff was reorganized in February and again in August with increasingly sharper definition of function. On March 4 Peyton C. March, after European experience as Chief of Artillery with General Pershing, assumed the duties of Chief of Staff; a few weeks later he was elevated to the rank of general. In the next six months the war machine, that had creaked and rumbled through its year of construction, gained everincreasing momentum, while the elevation of Foch produced the unity of command desired by the United States and the various inter-Allied councils improved the coördination of war aims and practices. Eighteen to The message brought back by Colonel House from the Paris Conference called for an increase in the scale of American preparations, and the outbreak of the German drive in March made it imperative that forty-five troops be sent at once. "It will be humanly impossible to get 250,000 men on the French territory within draft a year" was the regretful opinion of the Washington Post in July, 1917. But by the first of the following July more than four times that number had sailed for France, and in the two months, May and June, more than half a million men were transported across the Atlantic. As the American divisions one by one left their cantonments, "for an Atlantic port," their places were taken by new men called in under the draft, while new plans were prepared for the organization of the whole man power of the country. Congress authorized the calling-out of troops as needed without limit, and the General Staff prepared plans to have eighty divisions in the field for the campaign of 1919. On August 31 a Man Power Act was passed extending the draft ages to include the years eighteen to forty-five, and increasing the total number of military registrants to 24,234,021. The nation was completing its organization upon the basis of "work or fight" as the battle of 1918 entered into its second phase and tested the mettle of the Americans in France. BIBLIOGRAPHICAL NOTE The technical journals of political economy contain numerous articles on war regulation. Among them may be mentioned L. H. Haney, “Price Fixing in the United States During the War," in Political Science Quarterly (1919), and F. W. Taussig, "Price-Fixing as Seen by a Price-Fixer," in Quarterly Journal of Economics (1919). The Federal Reserve Bulletin contains most of the financial documents, as well as news and comment. The report of Judge Hughes upon the aircraft situation is in the Official Bulletin, November 6, 1918. Data for many judgments upon other aspects of the military program may be found in the numerous volumes of Hearings before the Select Committee on Expenditures in the War Department, (Washington, 1920). CHAPTER LIV THE AMERICANS IN FRANCE Training program of A.E.F. THE training program of the A.E.F. distributed the American divisions as they arrived in France in cantonments behind the line, where officers and men were put through courses of specialized study before the components of each division were brought together again for maneuver as a unit. After this course of schooling the divisions were transferred to quiet sectors on the western front, generally between Verdun and the Swiss border, and there relieved French divisions and received their final training for active operations. Four American divisions were ready for the active front when the German drive began, March 21, 1918, and were turned over to Foch to be used where needed. The Ist and 2d Divisions were built up, each around a nucleus of regular army troops; the 26th (Yankee) Division included the National Guard of New England; the 42d (Rainbow) Division represented the National Guard of most of the States. All of these were attached to the British or French armies, and brought into action in the early spring, while the strident call went out to America to hurry up more troops. The transport service, increased by British vessels taken away from their task of carrying food to England, for defeat was wavering in the balance and was a greater menace than starvation, rushed new divisions to France. addition to the four divisions ready for the front when the drive began, there were four more in the training areas; and additional divisions arrived, one in April, nine in May, seven in June, four in July, six in August, four in September, and three in October, until in the end there were forty-two divisions on the soil of France. In addition to these were special troops, not attached to any division, that swelled the American total which reached 1,000,000 in July and In |