QUARTERMASTER SUPPLIES
The quartermaster does not loom large against the heroic background of
war. The Army’s victualer and clothier collects few _croix de guerre_,
and his interest in the Congressional Medal of Honor is impersonal. So
long as his work is going well, you hear little about him; but let him
once supply some tainted beef to the troops in the field or fail to
deliver on time the Army’s winter underwear, and then the country takes
notice of the quartermaster.
God nowadays is on the side of the army with the best business
organization, as even Napoleon himself might admit if he were to look
over the cash balances of the late war. By that token the Quartermaster
Service was the chief factor in the victory, because that organization
became approximately the business office of the Army. For purely
the creature comforts--food, clothing, and shelter--the Army spent
far more money than it did for its weapons and ammunition; but the
activities of the army quartermasters embraced a much wider range
of supplies than these. Theorize as you will about the evolution of
the Army’s purchasing offices during the war until they were brought
together into a single centralized purchasing agency, the fact remains
that the ultimate purchasing agency was essentially the Quartermaster
Service, magnified and expanded in power. General George W. Goethals
was Quartermaster General when the General Staff Division of Purchase,
Storage, and Traffic (which unified all army buying and brought
order into the supply situation) was built around his personality
and ability, and thereafter his chief assistant bore the title of
“Quartermaster General, Director of Purchase and Storage.” The new
Division retained all the duties of buying quartermaster supplies and
assumed also the duty of buying all other supplies except the strictly
technical ones. And even these were purchased by the older supply
bureaus under the complete supervision of the Division of Purchase,
Storage, and Traffic.
When we approach the subject of the demobilization of the war industry
which produced quartermaster supplies, we confront what was, measured
in tons and in dollars and cents, the greatest business undertaking of
the war. These pages have been filled by the story of the spectacular
contest of American industrial genius with the inanimate resources
which it fabricated into airplanes, artillery, and ammunition; but
what filled the freight trains and the holds of the transatlantic
cargo transports and the fleets of roaring trucks on the roads of
France was not arms and the machinery of destruction to the degree that
it was eatables and wearables, tentage, stoves and ranges, pots and
pans--quartermaster supplies. There was the main weight and bulk; into
them went the most money.
The war business of the Director of Purchase was represented by
nearly 16,000 contracts. The total face value of these contracts
came to nearly $8,000,000,000. They represented all food procured by
the Army during the war and afterwards, all forage for the Army’s
animals, all clothing, all textile supplies of every sort, all shoes,
harness, and other leather goods, all animals purchased, all motor
vehicles, all wagons of every sort, all carts hand-drawn, engineering
supplies of many kinds, all coal, oil, gasoline, paints, hospital
equipment, medical and surgical supplies, hardware of all sorts, tools,
tentage and other camp equipment, rope, office supplies, and many
less conspicuous things. Several of these classes, it will be noted,
consisted of munitions formerly procured by the separate technical
supply bureaus, but the mass of them were the traditional quartermaster
supplies.
To get a comprehensive and clear-cut picture of the demobilization of
this branch of war industry, let us start in France and follow back the
home-bound expedition after it had closed up its business abroad.
In the first place, the A. E. F. became a heavy purchaser of
quartermaster supplies abroad. The purchasing office of the expedition
became a great business organization. It bought supplies in almost
every accessible country of Europe, and its agents even went to Africa
and made purchases in Algeria and Morocco. These supplies were bought,
not because America could not furnish them, but for the familiar sake
of saving the use of the precious ocean tonnage. And a great deal of
tonnage was saved by these foreign purchases. The Quartermaster Corps
with the A. E. F. purchased 400,000 tons of miscellaneous supplies, but
chiefly food and clothing, at the cost of $150,000,000. In addition,
many horses were procured in Europe. The greatest tonnage saving of
all, however, was brought about by the arrangement which permitted the
A. E. F. to purchase coal at the Welsh mines. The cross-Channel fleet
freighted more than 1,000,000 tons of coal from England. This not only
relieved the transatlantic fleet of the necessity of lifting that
amount of cargo, but it also permitted the employment in the Channel
of vessels not well adapted to the transoceanic convoying. It is a
moderate estimate that the American quartermaster purchases abroad
saved the transatlantic shipment of 1,500,000 tons of cargo, a lading
that would fill 300 large ships.
Naturally the armistice found France, principally, and the other
nations of western Europe to a slighter extent, liberally sprinkled
with A. E. F. contracts for the production of quartermaster supplies.
Sixty-six French factories, for instance, were working exclusively
for the Americans in producing bread, biscuits, macaroni, and candy.
The question immediately arose as to the best method of stopping all
European production for the A. E. F. The expedition’s warehouses and
depots were crammed to their capacities, and additional supplies were
on the ocean in transports bound for France. A month, even a week,
earlier it had not seemed possible that the industries of America and
Europe put together, could produce an oversupply of these munitions,
for the A. E. F. was looking forward to a strength of 4,500,000 men in
1919. But with the sudden armistice the expedition found itself with a
stock of supplies on hand which it could not possibly consume.
For that reason its European war industry was terminated abruptly.
There was little of the tapering-off of production that was
characteristic of the demobilization in the United States. The military
authorities were not nearly so considerate of the welfare of their
foreign contractors as they were of those at home. The American
business abroad was so small, compared with the whole war industry
of the countries of the Allies, that the outright abrogation of the
American contracts could not cause a general industrial slump. But
there were other considerations. The War Department could make use of
much of the domestic post-armistice production, either as war reserves
or as goods for sale. In Europe every pound of quartermaster supplies
produced after the armistice was likely to prove a dead loss to the
United States. Such supplies were not needed for military reserves, of
which there was an abundance already within the United States. They
could not be sold advantageously abroad, because there was no market
for them, with the Allied armies dumping their enormous surpluses on
that same market. They could not be shipped in reasonable time to
the United States for sale, because of the lack of ocean tonnage.
Consequently, whereas it was the policy within the United States
to terminate war industry gradually, the keynote of our industrial
demobilization abroad was outright cancellation. It was cheaper to
pay cancellation indemnities than to accept the supplies that would
otherwise have been produced; and this was the general policy adopted
in terminating all our foreign contracts, with such exceptions, notably
in some of the airplane and artillery contracts, as are noted elsewhere
in this volume.
To investigate claims and negotiate settlements with the European
contractors the A. E. F. created its Board of Contracts and
Adjustments, which for several months served as the liquidating agency
for the war business. Later the unsettled cases were turned over for
final disposal by the United States Liquidation Commission.
The termination of the foreign production for the A. E. F. was not
nearly so puzzling a problem as the disposition of the excess military
stores with the expedition. We had shipped from the United States
to the A. E. F. over 6,000,000 tons of military supplies, and those
shipments now crowded the warehouses in the American areas. After the
armistice the first step looking to the disposition of these stocks
was a rough, but fairly comprehensive, inventory of all military
property stored in our bases and depots. This inventory gave basis for
an estimate of a surplus valued at $1,500,000,000 over and above what
the diminishing forces abroad could possibly use. Nearly half these
excess stores were quartermaster supplies, therefore goods more or
less perishable. Long before the American cargo ships could transport
these supplies back to America they would have lost value to the amount
of untold millions of dollars. The Government faced an enormous loss.
Whatever was to be done about it had to be done quickly. The one way
out was to sell the surplus in Europe, but it was a grave question
whether that could be done successfully at all.
In the first place, all our army supplies had been placed in France
without the payment of any import duties. So long as these supplies
were being consumed by the American soldiers, well and good; but,
when it was proposed to sell them to private purchasers outside the
A. E. F., the French Government insisted upon its right to collect
import taxes upon such supplies as were to be sold. When the United
States was not ready to concede this point, then the French Government
offered the alternative of permitting the United States to sell its
surplus in France without payment of import duties, provided the sales
were made exclusively to the French Government itself. The United
States felt obliged to accept this condition.
Thus, in selling our surplus in France we were limited to a single
customer; and when you can sell your product to only one buyer you
must prepare to accept the buyer’s scale of prices. Of course,
the inhibition upon sales did not apply to sales to other foreign
governments; for in that event the American goods were regarded as
being in France in bond, and it was not incumbent upon the United
States to pay the French import duties upon them. On the other hand,
a physical reason operated against the sale of stores to European
countries outside France--the run-down and almost wrecked condition
of the French railroads. The delivery of locomotives and cars by the
Germans under the armistice terms virtually rehabilitated the rolling
stock of the French railways, but the trackage had deteriorated during
the war, and the incursions of military conscription had left the
operating _personnel_ poor in quality and deficient in quantity. It
was next to impossible to ship anything out of France. During the
early months after the armistice America sold surplus supplies to
various countries of Europe outside France--particularly to Belgium
and the liberated nations of southeastern Europe--to the value of many
millions; but, up to August 1, 1919, it had been able to deliver less
than one-fifth of these supplies.
Another advantage accruing to France as the principal buyer of the
American surplus was that the A. E. F. was making what amounted to a
forced sale. If anything was evident in the attitude of the French
people after the armistice, it was that they earnestly desired to speed
their departing military guests out of France. The American troops
no less ardently wished to go, and it was the policy of the American
Government to repatriate them as rapidly as the shipping could be
provided. The disposal of the supplies was a secondary consideration.
If the Americans had attempted to hold out for favorable markets and
good prices for their surpluses in piecemeal sales, they would have
had to keep from 20,000 to 30,000 troops in France for several years
to guard the unsold stocks. The alternative of hiring civilian guards
was out of the question, from the standpoint of expense alone. There
was nothing else to do except sell out quickly for the best prices
obtainable under the circumstances.
These obvious advantages to the French in striking a bargain price
for the bulk of the American surplus property in France was largely
counterbalanced by the fact that, of the American quartermaster
stores for sale, nearly half consisted of food supplies, and the
highest-quality food then in Europe. There was no oversupply of food
in Europe, but the very contrary. England had surplus army property
estimated to be worth more than $3,000,000,000; France herself had
almost as much to dispose of; and Italy was to be a heavy seller;
but the food stocks in all these Allied surpluses were not enough to
satisfy the hunger of the undernourished or actually famine-stricken
populations of Europe. The much-desired food was used by the American
authorities to induce the French not only to pay good prices for
materials they did not need, and of which indeed they had surpluses
of their own, but also to accept responsibility for such liabilities
as the American stores of unstable and dangerous ammunition and our
accumulations of junk.
Such were some of the conditions surrounding the bulk sale of A. E. F.
surplus property to the French Government in the summer of 1919. This
sale, as we have said, was consummated by the United States Liquidation
Commission, the activities of which are to be discussed in greater
detail farther on. Meanwhile a sporadic and piecemeal sale of A. E. F.
property in Europe had been going on under the direction of the General
Sales Agent and General Sales Board of the A. E. F. The General Sales
Agent took up his work on January 1, 1919. He was assisted by the
General Sales Board, which was made up of representatives of all the
army organizations that had anything to sell. Under this organization
the sales of surplus materials reached a total of approximately
$175,000,000 by the end of July, 1919, just before the general bulk
sale was closed. Of these receipts the sales of quartermaster supplies
accounted for $122,000,000. The supplies were sold almost exclusively
to governments and relief and welfare commissions. The sales to
commercial firms and individuals were insignificant.
Almost as soon as the armistice was signed the needy nations of Europe
opened negotiations for the purchase of excess quartermaster supplies
of the A. E. F., particularly food. Semi-starvation was chronic in
most of the newly liberated countries of southeastern Europe. The Poles
were still fighting and needed supplies for their soldiers. Belgium and
northern France were impoverished by the German occupation. Austria
was in the grip of actual famine, and the hungry mobs were rioting in
Vienna. In fact, some of the first surplus A. E. F. food to be sold
was shipped into Austria. It was a situation which demanded scientific
study, since, no matter how much the American officials individually
might sympathize with the European civilians, their first duty was to
safeguard the interests of the taxpayers of the United States; and that
meant to discover what ones of the needy were willing and able to pay
the best prices. Consequently the General Sales Board of the A. E. F.
created its information bureau, which investigated the conditions
throughout Europe and reported to the Board. These investigations
enabled the A. E. F. to distribute its surpluses intelligently.
Before the general sales organization took hold, the Quartermaster
Corps itself in France had been disposing of surplus stores during the
first weeks of the armistice. Many of these early sales were made to
Mr. Herbert Hoover for the Belgian Relief Commission. When, in January,
1919, Congress appropriated $100,000,000 for the relief of starving
Europe, Mr. Hoover, who had the spending of the money, was urged to
make use of the excess A. E. F. supplies as much as possible. The
largest single sale of A. E. F. surplus food was made to the Belgian
Relief Commission. About $30,000,000 changed hands in the transaction,
and the food sold included such items as 60,000,000 pounds of army
issue bacon, 122,000,000 pounds of flour, 6,000,000 pounds of rice, and
600,000,000 cans of evaporated milk. All this time, too, the General
Sales Board was selling directly to the Belgian Government; and the
Relief Commission coöperated with the Army to make sure that Belgium,
through these two channels of supply, did not receive an undue portion
of the army stores. There was always danger that Belgian speculators
might acquire stocks of such surplus products as fats and soap and
sell them into Germany at famine prices. Twice this coöperation was
able to checkmate the plans of cold-blooded profiteers. Next to making
advantageous sales, the chief concern of the General Sales Board was to
distribute its products fairly among the countries in direst need.
The Government of Portugal bought a large number of American army
shoes. Czecho-Slovakia took 10,000 army overcoats, much other
clothing, and several hundred tons of food supplies. The Polish Relief
Corporation bought quartermaster supplies to the value of $1,500,000.
Roumania took a consignment of food and clothing at $7,150,000.
Portugal took a shipload of potatoes f. o. b. Ireland. These nations,
Serbia, Esthonia, and several others, were constantly in the market for
American supplies. Esthonia bought 3,000 tons of army bacon. The French
Government, too, was a large purchaser during this piecemeal selling,
on one occasion buying American suspenders to the value of $22,000, as
well as large quantities of food and clothing.
For the most part the United States accepted debentures rather than
cash in payment for these supplies. It was obviously impossible to
secure cash, for the small nations did not have any, and even France
was skipping the interest payments on her five-billion-dollar debt to
the United States. The American Government accepted treasury notes or
other official securities at par, payable in three to five years with
interest at 5 per cent. And, although such credits would have been
heavily discounted in commercial centers, nevertheless America did
not try to cover by charging high prices for the surplus stores or by
exacting profits of any sort. The greater part of our supplies were
sold at the cost of manufacture in the United States plus the cost of
transportation to Europe, and plus nothing else. Consequently the sales
proved to be a great stroke of advertising for the fair name of the
United States.
Trainload after trainload of supplies sold in this fashion left the
American depots during the spring and early summer of 1919; but still,
when the bulk sale to France went through, these shipments had seemed
to make scarcely any impression upon the mass of the surplus, so
great had been the reserves created in France by American industry.
The utilization value of the surplus army property in France was
estimated at $1,000,000,000. Of this quantity, quartermaster stocks
(not including animals) were valued at $670,000,000. Of this surplus
an amount worth $87,000,000 (consisting principally of new clothing)
was returned to the United States, and the rest, except what had
been disposed of by individual sale, was turned over to the French
Government, the final delivery being made on November 15, 1919.
None of these sales included the used supplies repaired and restored
in the army salvage shops in France. Salvage was a new note amid the
age-old wastefulness of war. After the great battles of the Civil War
the countryside was littered with the débris of warfare. The bodies
of men and animals were buried, and the soldiers did what they could
to clean up by burning the refuse they could collect; but for the
most part the disposition of muskets, sabers, cannon, harness, and
clothing was left to the souvenir hunter and to the slow action of the
elements. After our battles in the World War far more materials were
left abandoned on the field than after any conflict of the Civil War,
but these materials were picked up and reclaimed for such value as the
Army could still get out of them. And the Army found that it could
make valuable use of salvaged materials, and particularly of salvaged
clothing. The savings wrought by salvage ran close to $150,000,000 in
cash value, besides representing a great economy in the use of shipping
space in the ocean transports.
Whereas, before the armistice, many of the recovered supplies went into
the army stores for reissue, in 1919, when the A. E. F. was rapidly
dwindling in size, the salvaged articles were sold, and principally to
the French. All through France one could see peasants of both sexes
wearing articles once of American army issue. Paris might dictate
women’s styles to America; but Paris, Kentucky, where dwelt some of
the seamstresses doing home work for the great army shirt factory at
Jeffersonville, Indiana, had something to say about what French women
wore. The French peasant woman wearing an American army shirt, with a
bit of ribbon for a collar, was a common enough sight in some of the
former American areas. Another familiar makeshift was the skirt made of
an ex-army blanket. Even the dumps, on which were thrown materials of
which the salvage shops could make no use, were carefully sorted over
by the peasants, who sometimes trudged for miles with their carts in
order to avail themselves of these opportunities.
Extensive commercial sales of salvaged materials were also made.
Crushed tin cans sold by the ton as metal scrap. Rags went to the
French paper makers and waste wool to the English textile mills.
Grease, damaged oats, damaged flour, and worn rubber tires also went
by sale. The Polish Army bought reclaimed American harness by weight.
A large number of outer uniforms, having shrunk in sterilization so as
to be too small for reissue, were dyed black and sold to the Belgian
Relief Commission for wear by destitute civilians. Germans paid record
prices for grease and other kitchen waste products. The salvage sales
in 1919 brought in more than $4,000,000.
The horses and mules used by the A. E. F. were not included in the bulk
sale of property to the French Government. The disposition of them (for
few, if any, A. E. F. animals were returned to the United States) was a
separate transaction, conducted almost entirely by the Remount Service
of the A. E. F., a branch of the Quartermaster Corps. The A. E. F.
acquired in all some 243,000 animals at a cost of $82,500,000. More
than two-thirds of them were purchased abroad by the Americans. The
mules numbered 61,000, and of these approximately half came from the
United States, the rest principally from southern France and Spain.
About 64,000 animals died in the service, and the rest were sold in
Europe either to various governments or to civilians, the recovery
from these sales being slightly more than $33,000,000. Thus the net
war cost of the animals used by our forces in Europe was approximately
$50,000,000.
With Americans the horse is (or is supposed to be) a single-purpose
animal, used exclusively for his power of motivity, whether that power
be exerted for speed or for pulling a load. To many Europeans he also
possesses gastronomic value, and this fact enabled the Remount Service
to get good prices for condemned horses from the expeditionary corrals.
About 11,000 horses, broken down by service, were sold by the A. E. F.
to French and German butchers, at an average price of $50 a head.
Because of the dearth of farm animals in France, the French Government
offered no objection to the sale of the surplus horses and mules
directly to private buyers. The chief condition made was that the
animals must first be offered (at auction) to farmers whose horses
had been requisitioned during the war. If these men would not offer
satisfactory prices, then anyone was to be allowed to bid. Then the
French Government arranged to take over 15,000 A. E. F. animals and
dispose of them for the expedition. The prices obtained from the French
Government under this arrangement were so much below what the A. E. F.
was obtaining from its auctions that the United States Liquidation
Commission sought and received authority to dispose of all the animals
at auction. Because of the high taxes and auctioneers’ commissions,
even the auction sale was not satisfactory; and the Remount Service
asked permission to sell animals at private sale. This permission was
never formally granted, but nevertheless the Remount Service went ahead
and sold thousands of animals directly to buyers. The average price
received from the French Government was $77.58 a head, whereas from
the auction and direct sales to private purchasers the average price
received was $201.65.
The French Government itself, by direct purchases from the A. E. F.,
took 50,000 animals at an average price of $190.21 a head. Thousands
of surplus animals at good prices went to the governments of Belgium,
Poland, Czecho-Slovakia, and Bavaria. To civilians in France and
Germany went 85,000 A. E. F. animals. Approximately the last of the
original 243,000 had been sold when the final troops of the A. E. F.
departed for the United States in the late summer of 1919.
Although we sent to France some of the finest mules in America (and,
therefore, in the world), there was at first some difficulty in
disposing of them to the French buyers. The farmers of southern France
knew the mule and justly valued it, and during the early months of
the demobilization a constant stream of American army mules went
into that region for sale. Finally the southern French mule market
became glutted, and then it became necessary to “sell” the mule to the
farmers in the American areas in northern France. The French peasants
did not hold the mule’s clouded ancestry against him, but what their
thriftiness did object to was his dearth of hope of posterity. However,
after a few of the peasants had bought and worked the army mules, the
good qualities of the animal became widely advertised, and thousands of
them thereafter were bought at good prices.
After the armistice the first step in the liquidation of the
quartermaster war business and of the other enterprises conducted by
the Director of Purchase in the United States was to terminate the
industry and to settle with the contractors, of whom, as is indicated
above, there were approximately 15,900--parties to agreements which
committed the United States to purchase supplies to the value of more
than $7,800,000,000. A large part of these were quartermaster supplies,
but they also included motor vehicles and engineering, medical, signal
corps, and general supplies, the procurement of which, under the
reorganization of the War Department, was placed in the hands of the
Director of Purchase.
[Illustration:
_Photo by Signal Corps_
A. E. F. SUPPLY TRAIN ON WAY TO RATION DUMP]
[Illustration:
_Photo by Signal Corps_
A. E. F. FLOUR ON WAY TO STARVING AUSTRIA]
The immediate result of the armistice was to silence the activity in
these thousands of factories. The Director of Purchase sent broadcast
by telegraph a general request to suspend all production while the War
Department could estimate its position. After a few days the mills
were permitted to resume production. Subsequently about 5,000 of the
contracts were allowed to go through to completion. The remaining
11,000 were terminated either abruptly, as with those under which no
production had started, or by graduation, when that was advantageous
either to the Government or to the industrial situation.
[Illustration:
_Photo by Signal Corps_
A. E. F. HORSES TO BE SOLD]
[Illustration:
_Photo from Quartermaster Department_
STORAGE WAREHOUSES AT JEFFERSONVILLE DEPOT]
Like the Ordnance Department and the Air Service, the Quartermaster
Corps decentralized the supervision of its war industry into
manufacturing districts--thirteen of them--which were called zones.
When most of the purchasing activities of the War Department were
brought together under the Director of Purchase, these zones came
along with the transferred organization, as did also seven procurement
divisions taken over from the other supply bureaus. During the
demobilization, claims boards were established in all the zones and
procurement divisions. These twenty primary boards were subsidiary to
the general Purchase Claims Board, which in turn was responsible to the
War Department Claims Board through the representative of the latter
attached to the Purchase Claims Board. This was the organization which
settled the vast war business conducted under the Director of Purchase.
The general policies, the application of which to the termination
of the ordnance contracts we have already described, were followed
in closing out the industry which manufactured our quartermaster
supplies. The Government paid no prospective profits, but stood all
the legitimate expenses which the manufacturer had incurred looking to
future production of finished supplies.
But it was not all termination and no buying for the Director of
Purchase after the armistice. There was still an enormous army in the
field and camps which had to be sustained; and, while great surpluses
existed in some branches of supply, in others, such as immediately
perishable supplies, the stocks on hand were sufficient for only a
few weeks ahead. The purchases between the date of the armistice and
January 24, 1920, by which date the demobilization of troops was about
complete, came to $611,000,000, of which food purchases accounted for
$420,000,000.
One national inheritance from the war experience in buying
quartermaster supplies has been the creation at Chicago of a permanent
subsistence school to which the Army sends officers and enlisted men
for training as inspectors and buyers of food supplies. Another is
the creation within the War Department of a division which studies
the sources and supplies of the raw materials used by war industry
and also determines the priority of access to these materials by the
various consuming branches of the War Department. When the war came,
the United States was sadly lacking in the very knowledge which these
studies will develop. During the war the development of raw materials
and the determination of priorities were administered by the Council
of National Defense and, later and more successfully, by the War
Industries Board, which became perhaps the most powerful and important
of all the emergency war organizations. The War Department is thus
retaining a nucleus around which another such organization might be
built in a future emergency.
No outline of the demobilization of the quartermaster war enterprises
portrays an adequate picture of what happened unless it tells something
about the termination of the Government’s wool business. To protect
its war interests the Government requisitioned all the raw wool in
the United States in 1917 and 1918. Uncle Sam himself became the wool
trade, the sole dealer, the sole market. Although the Navy and several
other government branches used wool, the control over the commodity
was exercised by the War Department through its Wool Administrator at
Boston, who reported to the Quartermaster General in Washington.
On the first day of the armistice the Government had on its hands, or
was obligated to accept delivery of, about 525,000,000 pounds of wool,
a quantity which may be visualized by comparing it with the total
annual American production of wool, which is less than 300,000,000
pounds. About one-fifth of this quantity was Australasian wool which
had been purchased by the Foreign Mission of the War Industries Board.
About 100,000 bales (33,000,000 pounds) of the Australasian wool had
been shipped to the United States. We were left, therefore, with a
binding contract to accept 200,000 bales from the Antipodes, this
to come piling in on top of an accumulation which comprised a huge
surplus over and above the normal national consumption. By some clever
business jockeying (the British having various American contracts which
they also wished to terminate) the British Government was induced to
cancel the unfulfilled portion of the wool contract.
Even with this deduction, the Wool Administrator had, in the late
autumn of 1918, about 460,000,000 pounds of wool to dispose of. The
normal textile industry had never before been called upon to absorb
such a visible supply, and there was some question if it would be
able to do so. The manufacturers naturally began at once to urge
the Government to dump its wool on the market. The 700,000 American
wool growers, on the other hand, who had been receiving a high and
stable price for wool (the price adopted on July 30, 1917) urged the
Government to stay in the business for another year at least and take
the 1919 clip at the war price.
The decision in Washington was to sell the wool and get out of the
wool business at once. This was displeasing to the farmers; but, to
prevent any drastic slump in wool prices, the War Department decided to
sell its wool in auction sales, in which the Government itself would
set minimum prices below which no wool would be sold. This action
guaranteed that the growers would get a fair price for the 1919 clip.
Within approximately a month after the armistice the wool auctions
began--first at Boston, where in three days (December 18, 19, and
20, 1918) the buyers bid in over 10,000,000 pounds of wool, out of
17,000,000 pounds offered for sale. The unsold offerings, of course,
were lots for which no buyers bid up to the minimum fixed prices.
Although prices were fixed, only in a sense were they sustained
artificially. For each sort of wool the Government fixed a minimum
price which equaled what it would cost to import the same quantity
and grade of wool and deliver it to the American market. Thus the
world prices actually prevailed, except that the huge American surplus
was artificially kept from being a depressing factor in the world
price. To sustain prices higher than these would have attracted large
importations and thus injured the growers. To allow prices to go lower
than the importation prices would also have worked injury to the wool
growers of the United States.
As a further concession to the farmers, the Government announced that
it would stay out of the wool market when the 1919 American clip began
reaching the market in quantities sufficient to supply the mills. In
accordance with this promise, the government wool sales ceased on July
1, 1919, and did not resume again until the following November.
When the auctions suspended on July 1, more than 316,000,000 pounds
of the Government’s wool had been sold. Auctions had been held twice
a month in Boston and once a month in Philadelphia, and three sales
had been conducted at Portland, Oregon, for the benefit of the western
woolen mills. Upon the resumption of the sales in November the wool
continued to sell well, with the result that by the end of 1919 the
sales had disposed of 365,000,000 pounds, and the success of the
complete liquidation was assured. The sale of this wool was a triumph
of merchandizing. The wool trade had never known such sales before, not
even in England, the world center of wool, nor had the American trade
ever before absorbed such a quantity of wool in such a short time.
Like the storied mill which ground salt until it swamped the ship of
the thieving merchant, the mill producing quartermaster supplies before
the armistice was hard to stop afterwards, and its output embarrassed
the War Department for want of space in which to store the excess
supplies. As long as the home Army and the A. E. F. were expanding in
size and the convoys grew in size and frequency, there was no critical
backing-up of supplies. Immediately after the armistice, however, the
order came to ship no more freight to France, except food and other
necessaries specifically requested. At the time of the armistice there
were 600,000 tons of supplies on the docks in this country and 400,000
other tons moving toward the seaboard. Since the mills kept right
on producing more, the flood of new materials inundated the supply
service in this country. In December, 1918, the Storage Service was
operating 65,000,000 square feet of warehouse space in the United
States. A year later it was occupying nearly 400,000,000 square feet,
three-fourths of which was leased. A large quantity of this space
was open storage, unprotected from the elements. These figures are
exclusive of the quantities of warehousing and open storage occupied
by the various technical bureaus, such as the Ordnance Department, the
Air Service, and the Signal Corps. The operation of the general storage
facilities was the charge of the Director of Storage, one of the chief
functionaries of the Division of Purchase, Storage, and Traffic.
An even greater problem than storage was the disposition of the
enormous surpluses of goods which accumulated after the armistice. The
first concern of the War Department in approaching this question was
the military future of the United States. In 1914 much was made of the
thoroughness of German military preparation, which had been such that,
when the fatal hour struck and the conscripts by hundreds of thousands
left their homes and poured into the German barracks, for every man
there was waiting ready a uniform, shoes, a helmet, underclothing, and
everything needed to prepare him immediately for service in the field.
What Germany had been able to accomplish by premeditated, long, and
expensive effort, the United States now derives as a by-product of the
war Germany forced it to fight. America, too, is now prepared in these
minute details. Before any of the surplus quartermaster stocks were set
aside for sale or other disposition, a complete and balanced selection
of uniforms, overcoats, underclothing, socks, caps, shoes, and other
nonperishable articles in the individual equipment of troops, in
quantities sufficient to outfit an army of approximately 1,000,000 men,
was set aside and placed in indefinite storage. In addition, stores of
such supplies were retained for the future consumption of the regular
standing Army, of the National Guard, and of the Reserve Officers’
Training Corps.
The war construction provided for the War Department three enormous
interior reserve depots located respectively at Schenectady, New York,
New Cumberland, Pennsylvania, and Columbus, Ohio. In these many of
the reserve quartermaster supplies are stored. These installations
are all of permanent and spacious construction. The warehouses are
nearly all one story high, built of hollow tile and concrete, and
divided into sections by fire walls. For additional storage the War
Department is also using numerous wooden warehouses built at the
retained cantonments. These buildings, though well constructed, are not
fireproof and have to be guarded carefully to prevent their destruction.
It was found further that various branches of the Government could make
good use of supplies originally procured for the Army. Many of the
army hospitals were turned over to the Public Health Service, and with
the hospitals the War Department delivered large quantities of medical
supplies. Incidentally it may be noted here that the Army has retained
and stored sufficient field medical equipment for an army of 1,000,000
men. Large lots of such general supplies as hardware, tools, rope,
brushes, and office furniture went to the Bureau of Public Roads, the
Interior Department, the Panama Canal, and other federal agencies.
Then, several foreign governments were allowed to purchase from our
excess supplies. Clothing, textiles, medical equipment, and other
supplies, all to the value of $20,000,000, went to various Russian
societies. The French Government took machine tools and other machinery
originally built for the Engineers, to the value of $25,000,000.
Belgium bought a large quantity of construction materials.
In selling surplus materials to consumers in the United States, the
preference went to charitable and welfare organizations. Hospital
equipment, for instance, was offered first to state and municipal
hospitals, free clinics, and similar institutions. Prices for medical
supplies were fixed far below the prevailing market prices; and yet the
Government had manufactured this equipment at such low cost that the
financial recovery from the sales represented practically every penny
which the War Department had put into the supplies. General supplies
were offered first to welfare organizations, the Young Men’s Christian
Association, the Boy Scouts, hospitals, sanitariums, and relief
societies.
After that came the public. Private dealers were permitted to bid on
lots of supplies. Regular days were set apart for the sale of various
classes of commodities: Monday, textiles and leather goods; Tuesday,
raw materials, machinery, and engineering supplies; Wednesday, general
supplies; Thursday, medical supplies and motor vehicles; Friday,
clothing; and Saturday, food supplies. These bidding sales were widely
advertised, in advance, and bids could be submitted either to the War
Department in Washington or to any of the zone, or district, supply
offices. The private consumer could buy army food, clothing, textiles,
tools, and other commodities of household utility either by parcel post
(through the coöperation of the Post Office Department) or at any of
the Army’s retail stores, a great chain of which was set up throughout
the country.
By sales and transfers the Army, at the end of the first year
of effort, had disposed of supplies originally procured under
the administration of the Director of Purchase to the value of
$357,000,000. The transfers and sales brought back to the War
Department more than seventy-seven cents of every dollar originally
expended in the production of these goods. The story of the ingenuity
displayed by the Government’s officers in selling these and other
surplus supplies (particularly the surpluses in the hands of the
Ordnance Department and the Air Service after the armistice) is left
for another chapter.
Before dropping the subject of the demobilization of the quartermaster
war business, however, we should not overlook the disposition of the
horses and mules acquired by the Army, but not shipped to France.
The Remount Service purchased about 308,000 animals during the war.
It started the war with about 90,000 animals on hand. The war losses
amounted to 33,000 animals. Approximately 68,000 were shipped to
France. Thus, at the time of the armistice the Remount Service had in
its stables and corrals nearly 300,000 horses and mules. About 215,000
of these were declared surplus and sold, and the rest were retained for
the permanent Army.
The decision of the Remount Service to sell 200,000 animals on
the market as rapidly as the market could absorb them was roundly
criticized by horsemen, who pointed out that normally the American
market had never absorbed more than 60,000 horses and mules in a year.
The result would be, the critics declared, that the Government would
get fair prices for the first 50,000 or 60,000 animals offered, and
after that the surplus animals would be a drag on the market, not
only forcing the Government to stand a great financial loss, but so
depressing prices that dealers everywhere would suffer. On the other
hand, it was costing the Government a dollar a day to feed and care for
each of these animals. By retarding the sales the Government might be
able to get better prices, but the gain would be more than absorbed by
the cost of maintaining the establishment in the meantime.
And so it worked out. The market, indeed, proved itself to be able to
absorb the surplus animals, and prices even grew better as the sales
progressed. The average price paid was $111 a head, or about 57 per
cent of the original average cost of $192. On the other hand, the
Government escaped paying heavy maintenance charges.
All the animals were sold at public auctions, 189 of which were held
at thirty-nine different places. Great crowds of buyers attended
the sales, most of which were held at camps where the animals were
quartered. The local post exchanges sold sandwiches and other
refreshments to the buyers. Although the Government guaranteed no
animals, all of them were carefully examined for blemishes and defects
before the sales, and their demerits were noted in the lists read by
the auctioneers. The Government could not afford to gain a David Harum
reputation as a horse trader, for it had too many animals to sell. If
dissatisfaction arose from the earlier sales, it would adversely affect
the later ones. Only five complaints from buyers were made after the
sales. These were referred to the Purchase Claims Board for settlement.
The Government invested $74,000,000 in animals bought in America during
the war. Its net loss on animals sold was $22,000,000, and on animals
that died, $6,000,000. The best of the animals on hand after the
armistice were retained for use by the permanent Army.