BUILDINGS AND LANDS
One of the major industrial activities conducted in the United States
during the war was the construction of buildings for the Army. The
Army’s physical plant, as it existed on the day war was declared, was
entirely inadequate for the forces to be mobilized--so inadequate as
to be of almost no use at all. Even the old headquarters of the War
Department in Washington, which formerly had housed practically all the
administrative offices, were none too large to accommodate merely the
office staffs of the Secretary of War and his principal assistants,
so great was the expansion of the central administration; and as for
the tens of thousands of officers, clerks, stenographers, messengers,
and other _personnel_ employed by the great producing and operating
bureaus, they occupied literally miles of flimsy, unsightly “war
buildings,” which spread out like a defacing rash over the fair open
spaces of the capital city.
An even greater expansion of plant was to be observed throughout the
country. The plant set up for the Army mobilized against Germany was
a practically new creation, specialized for exactly the sort of war
in which we were engaged. It was a war in which land transportation
had to be linked to ocean transportation, and therefore the plant
included vast facilities for the embarkation of troops and a string
of mighty export terminals, or bases, strung out along the coast in
order to make difficult any blockade of our overseas supply line.
It was a war essentially industrial in type, with unusual emphasis
laid upon the development of special industrial products, such as
powder and explosives; and therefore the plant included dozens of new
mills and factories, several of them industrial centers so large as
to be virtually small cities in themselves, with housing and modern
municipal conveniences for their employees. It was a war in which
new and hitherto unknown forms of combat had sprung into existence,
and therefore the plant included equipped fields for the training
of soldiers in such arts as flying and the employment of poisons
as weapons. Above all, it was a war which called upon the ultimate
resources of American man power; and, as it turned out, the plant had
to be adequate to house, school, amuse, care for, and maintain at least
two million men, with all that that implies in barracks, drill grounds,
parks for vehicles, water and sewer systems, lighting systems, roads,
hospitals, and (in the maintenance line) depots and warehouses for
supplies.
It was all fresh creation, new construction. The building industry of
the United States--and it is one of the largest and strongest of our
industries--had never before been called upon to provide such expansion
in an equal time. It follows that the entire building industry must
have been engaged in the construction enterprise, that every available
man who could drive a nail or lay a brick must have been employed
upon government work. If he was not, he should have been; for those
in charge of the construction, unable to secure sufficient labor from
the entire building industry of the United States, sent ships to Porto
Rico and the Bahamas and brought back thousands of workmen to help out.
The Construction Division, the war-begotten organization which was in
charge of this activity, with 427,000 men on its contractors’ pay rolls
at the peak of its industriousness, yielded only to the United States
Railroad Administration the title of greatest employer of war labor.
It engaged in 581 separate construction projects, which called for an
expenditure of over $1,100,000,000; and it completed most of them.
Miles of docks, hundreds of acres of covered storage, hundreds of
power plants and complete water systems, thousands of miles of roads,
railroads, water mains, and sewer lines--the list grows monotonous
simply because of the size of its items, which are not to be visualized
by stating them in terms of acres and miles. The activity was at its
height at the signing of the armistice, when it became incumbent upon
the Construction Division to terminate the work.
Four hundred and fifty army construction projects were under way on the
day of the armistice. One hundred and thirty-one stood completed. The
incomplete projects included some of the largest and costliest ones.
But the salvage value of buildings is small unless they can be sold to
purchasers able to make use of them as and where they stand. Few war
buildings were adapted to civilian use. They were highly specialized
for a purely war use, and they were not often located where they could
be of economic benefit to the country. A large part of their cost
represented the evanescent element of labor, a value entirely destroyed
when buildings are wrecked for the sake of salvaging their materials.
The war plant, even incomplete, represented an immense investment,
but one which would be almost altogether lost if the plant were to
be knocked down for salvage. Therefore it was of advantage to the
Government to carry on a surprisingly large amount of war construction
after the armistice for the sake of getting the use-value from its
investment by occupying these installations with the permanent Army.
But there were other reasons for continuing work. Among the largest
and costliest of the construction projects were those which provided
the ocean terminal bases at Boston, Brooklyn, Philadelphia, Norfolk,
Charleston, and New Orleans. These installations were all of durable,
fireproof construction; and, with their piers, their great warehouses
equipped with labor-saving machinery, trackage, and the like, they were
the last word of modern constructional science in developments of this
sort. In appropriating the money for these port works, Congress had
stipulated that after the war they should be used in the development
of American foreign trade. Consequently the Construction Division went
ahead after the armistice and finished up these buildings.
The port works alone were enough to account for a large portion of the
money expended on construction after the armistice, but in addition
other great unfinished projects were carried through. As we have shown,
the storage problem became acute only after the armistice, when the
wasteful field consumption of supplies ceased and the materials coming
from the war factories banked up in this country. Every warehouse and
depot project incomplete on the day of the armistice was pressed to
completion thereafter in order to provide shelter for valuable and
perishable materials. This was another great branch of post-armistice
construction. Add to these the continued construction of hospitals
(which had to be prepared to receive the thousands of wounded men
in France on the day of the armistice), and it becomes evident why
thousands of the war builders were kept on the job after the war itself
had come to an end.
The fate of every incomplete army construction project on the day of
the armistice was submitted to the Operations Division of the General
Staff, which looked at the percentage of completion, noted whether
the Government owned the ground on which the construction was going
forward, studied the availability of the building for commercial
use, and determined whether it was needed in the military plans, and
then recommended that the construction be abandoned, curtailed, or
completed. In general, the projects abandoned were those providing
additional facilities for the assembling and training of troops and
those providing plants for the production of destructive munitions,
such as toxic gas, powder, and loaded shell. Of the 450 projects
incomplete on the day of the armistice, 182 were abandoned and 268
carried through.
The completion of so large a quantity of the war construction after
the armistice enabled the Construction Division to go through the
demobilization of its industry without accumulating large stores of
surplus materials. Although in form, at any rate, the Division dealt
directly only with contractors who took the various jobs, actually the
Division itself procured the lumber, cement, brick, structural steel,
roofing, hardware, and the like, for the builders. The demand of the
war construction upon the supplies of building materials was so great
that nothing less than a centralized stimulation and control of the
entire market could have procured the materials in the quantities
needed. The Construction Division’s Procurement Division located the
supplies and then arranged each building contractor’s deals for them,
even stipulating the producers, quantities, and the prices which
must be paid for materials. This last was important, because the
war builders worked under a sharply safeguarded cost-plus contract
form, and therefore the Government was keenly interested in what the
materials cost. In addition to procuring supplies for the contractors,
the Procurement Division also purchased equipment for the war
buildings--heating, ventilating, and power plants, fire extinguishers,
refrigeration equipment, boilers, engines, and machinery of many sorts.
Its purchases ran at the rate of $2,000,000 a day in the early autumn
of 1918.
After the armistice and after the temporary suspension of effort
requested in order to give the Construction Division time in which
to take stock of its position, the production of building materials
and supplies of which the Government would be able to make no use was
rapidly terminated. The Procurement Division was made up of experts in
all branches of building construction, and therefore this Division was
made over after the armistice into the Construction Division Claims
Board for liquidating its war business under the direction of the War
Department Claims Board. In six months practically all the terminated
contracts had been finally settled by this organization, at an average
cancellation cost of 5 per cent of the face value of the contracts.
The termination of supply contracts and of contracts with constructors
of buildings not needed by the War Department after the armistice,
left the Construction Division with large quantities of supplies on
its hands. But these were by no means surplus supplies. The completion
of a large quantity of war construction after the armistice saved the
Construction Division from having to solve the problem of disposing of
much surplus. Supplies accumulated for the terminated jobs were simply
diverted to those ordered completed and thus utilized.
But although the Division had no large quantity of building supplies
to sell, it was charged, after the armistice, with the duty of
disposing of the facilities at the 182 construction projects which
were terminated. Many of these projects were large ones, those in this
category being for the most part training camps for troops. There
was a camp shortage in 1918, and the Construction Division was doing
everything in its power to overcome it. We were sending men overseas
at the rate of 300,000 a month; and, since it was desirable to give
every overseas soldier at least six months’ training, that implied
camp accommodations for 1,800,000 men in the United States. The actual
accommodations provided were for less than 1,370,000 troops. In 1918,
after the augmented rate of embarkation became a fact, new training
camp projects were consequently inaugurated at frequent intervals. Only
a few days before the armistice the Construction Division began the
construction of an enormous new camp which was to specialize in the
training of infantry. All the national guard camps (sixteen of them)
and most of the special-purpose camps, whether completely built or not,
were condemned after the armistice for salvage. Most of these were
veritable cities, some of them large enough to accommodate 40,000 men
each, comfortably--with the adverb accented, for the comfort was based
on such substantial (and costly) installations as water and sanitation
systems, electric lighting, pavements, sidewalks, and even stores,
theatres, and gymnasiums. It was the task of the Construction Division
to dispose of these cities to such members of the public as cared to
buy.
A city, however, is something more than an accumulation of buildings
and other tangible facilities. Quite as much as upon foundations of
rock, a city rests upon logic--the logic of its location. Naturally the
Government built its camps upon cheap land, therefore upon land not
in demand by the population, therefore upon land not so located as to
make it a logical place for a city. And so, although it was thought at
first that perhaps some of these camps might prove to be the nuclei of
permanent civilian communities, that notion soon had to be abandoned
for the reason that few civilian movements arose to occupy permanently
the former war buildings. An attempt was made, and still is being made,
to use the former Nitro Powder Plant as a permanent civilian industrial
city, and one or two training camps in the South have been held
together by their purchasers with the idea of establishing communities
on their sites. The others, however, in which the Government had sunk
hundreds of millions of dollars, were sold out to the wreckers, who
bought them for the sake of salvaging the building materials.
Now, there is nothing quite so second-hand as second-hand building
materials. Boards are full of nail holes and sometimes covered with
faded paint or disfiguring marks. Bricks are soiled, chipped, and worn,
and conglomerated with stonelike mortar. Hardware and metallic fixtures
are corroded and rusty. Such materials are not only wreckage and
junk, but not even valuable junk. The chief cost in the construction
of a training camp was the labor which laid the brick, installed the
underground piping, smoothed, squared, and nailed up the lumber, and
soldered the joints in the plumbing. All that labor value was lost when
camps were salvaged for their materials.
Yet this was not the only loss which the Government was forced to
sustain. Practically all the camps were originally located on leased
ground; and this fact implied that in razing the camps the Government
was bound to restore the land to its original condition, or, in
lieu of that, to pay to the owners the costs of restoration. These
questions of property damage greatly complicated the demobilization
of the training camps, because the amounts of damage were so hard to
ascertain. Concrete roads had been laid across what were originally
pastures; fertile corn lands were crisscrossed with clay ridges thrown
up above the water and sewer trenches. On the other hand, some of the
camp improvements had drained former swamps and reclaimed them for
cultivation, and such benefits would offset damages in other places. It
was out of the question for the Government to attempt to settle these
thousands of cases individually, because of the time it would take;
and therefore it was stipulated that the purchasers of the camps must
assume all liabilities for property damage and hold the Government
harmless from claims that might later be pressed in the Court of
Claims. Naturally the purchasers made allowances for these damages in
their bids, and wide allowances, too, since the extent of the damages
was largely conjecture. This consideration further depressed the prices
paid by the purchasers.
The result was that the salvage of abandoned army camps brought back
to the Government only a small fraction of the money put into them.
Actually in scores of instances it would have been cheaper for the
Government to abandon the improvements to the landowners in return for
quit-claims for the property damage. Public policy, however, prohibited
such a short-cut method. Some of the leased sites had been donated to
the Government before the armistice at the nominal rental of $1.00 a
year or some other slight sum; but afterwards the chambers of commerce
and other civic agencies which had made these concessions, for the
sake of securing camps near their communities, refused to renew the
arrangements, and the War Department was forced to pay regular rentals.
Here was a consideration to force the sale of the camps on any terms
possible. The chief lesson learned from the war construction enterprise
was that the Government should buy and not lease a site when the value
of the improvements is to exceed the value of the site itself. Only
by holding such property for permanent use or gradual sale can the
Government get value received for its investment.
In general, the salvage recovery from camps and other installations
sold after the armistice amounted to about 15 per cent of the money
invested in the original building materials. All labor values were
lost. All wastage of materials in construction and demolition was loss.
Many materials such as cement and concrete, road material, roofing,
wood-stave piping, sewer piping, and so on, were a complete loss. The
attention of the reader is invited to some typical shrinkages in value.
+----------------------------------------------------+
| _Project_ _Original Cost_ _Salvage Recovery_|
+----------------------------------------------------+
|Camp Beauregard $4,300,000 $ 43,000 |
|Camp Bowie 3,400,000 110,000 |
|Camp Hancock 6,000,000 75,000 |
|Camp Logan 3,300,000 137,000 |
|Camp Wadsworth 4,000,000 95,000 |
|Camp Wheeler 3,200,000 144,000 |
+----------------------------------------------------+
Note, however, that in disposing of these camps, the Government
retained practically all the storage and hospital facilities.
During the year following the armistice the Construction Division
disposed of fourteen national guard camps, three embarkation camps,
sixteen special and regular training camps, four flying fields, four
hospitals, and many small groups of buildings. For these the Government
received about $4,215,000. In addition, parts of many other camps were
sold; also construction materials of practically every sort.
The most spectacular accomplishment of the Construction Division
before the armistice was the building of the cantonments, the primary
training camps which housed the soldiers summoned into the military
service by the Selective Service Law. These were much more substantial
installations than the national guard camps, the salvaging of six
of which was noted in the tabular statement above. The national
guard camps provided only tentage for the shelter of troops, whereas
the cantonments housed their inhabitants in stanch wooden barrack
buildings. A cantonment cost from two to three times as much as a
national guard camp. Yet, on three months’ notice, at the beginning
of which not even the sites had yet been selected and acquired, the
Construction Division prepared sixteen cantonments ready to receive the
first inductives called to the colors.
The cantonments originally were all built upon leased ground. It was
evident that, if the Government were forced to vacate the ground to the
owners, the cantonments, salvaged for their building materials, would
bring no greater recovery percentage of their cost than did the tentage
camps. The Government’s loss, in such an event, on each cantonment
would be twice or three times what it proved to be on the national
guard camps. Before the end of the war was in sight the Construction
Division had anticipated demobilization by presenting a plan to the
Secretary of War for the purchase of the sites of the cantonments.
Purchase would accomplish several desirable ends. As long as the
cantonments were in use it would save the payment of rents. After the
war was over, if the cantonments were retained by the Army, it would
give the cantonments their full use-value, which was every penny they
had cost. If, on the other hand, the decision was to dispose of them
after the advent of peace, then ownership of the sites would permit the
Government (1) to market the materials gradually and avoid beating down
prices by glutting the market; or (2) to sell buildings intact, with
the land on which they stood; or (3) to sell entire cantonments as they
stood, together with title to the lands. Any one of these methods of
disposition would bring a far greater salvage return than the forced
sale of the materials and the payment of property damages.
In March, 1919, the Assistant Secretary of War directed that the leased
sites of fourteen of the cantonments--namely, Camps Custer, Devens,
Dix, Dodge, Gordon, Grant, Lee, Jackson, Meade, Pike, Sherman, Taylor,
Travis, and Upton--be acquired by purchase. The investment in these
cantonments was approximately $155,000,000. By continuing to use the
cantonments, the War Department could get full value received for the
money expended. By salvaging them after the manner of disposing of the
national guard camps, the Government might recover $4,000,000 at the
outside estimate. By selling the materials gradually or the buildings
intact with lands, the recovery could be expected to run as high as
$48,000,000. The business logic of the proposition was irresistible.
The purchase of this vast quantity of land was undertaken by the
Construction Division. After the commanding officers at the cantonments
had indicated what boundaries should be included, the Division sent
out its field forces--on April 21, 1919. First to go to work were
engineers and surveyors to fix accurate boundaries and secure complete
metes-and-bounds descriptions of the properties. Contracts were drawn
with various responsible title companies to make search of the land
titles and to guarantee them with title insurance. Next followed
acquisition officers who closed sale contracts with the private owners.
The sale contracts were finally signed in behalf of the Government by
competent officers. With the acquisition officers traveled disbursing
officers of the Finance Service who stood ready to pay spot cash for
the lands the moment the sale contracts were signed. So rapidly was
this work carried on that in two months the Government had acquired
ownership to more than half the area on which the fourteen cantonments
stood. A year later about 55,000 acres had passed in fee simple to
the United States at a price of $6,762,000. Considerable property was
yet unacquired; but, although it had been estimated that the sites
would cost ultimately $9,657,000, the indications then were that the
Government would secure them for not more than $8,115,000.
It was found to be impossible, however, to secure all the property so
simply and easily. Some owners would not sell at reasonable prices;
other owners could not be found; still others were under legal
disabilities which prevented them from selling. In such instances the
recourse of the Government was condemnation of the lands. Proceedings
were instituted eventually to condemn some 22,000 acres for government
use. The condemnation proceedings were conducted by the Department of
Justice, which found this work to be one of great magnitude.
One of the interesting war developments in the United States was the
change in the attitude of the War Department toward real estate.
Before the war the various bureaus and other agencies of the War
Department acquired their own real estate by lease or purchase as
they needed it and as they could secure authority to procure it.
The war itself resulted in an intense demand for real estate by the
War Department as sites for its war buildings or as quarters to be
occupied under lease. Real estate, therefore, came to be regarded as
a commodity in the supply of the Army; just as much a commodity as
food or ammunition. And, as the procurement of other commodities was
eventually administered and controlled by a centralized agency, so the
centralized procurement of real estate was placed in the hands of a new
organization called the Real Estate Service.
The Real Estate Service acted as the Army’s real estate agent. The
various bureaus still originated the projects for the acquisition of
property, and then the Real Estate Service acquired the property as
agent for the bureaus. The Service was composed of experts who saw to
it that deeds and leases were correctly drawn and that the Government
made good bargains.
The armistice, if anything, meant increased effort for the Real Estate
Service, since the problem of the storage of surplus supplies was to
be solved only by the acquisition of space. It was also necessary to
dispense with high-priced locations, essential as they had been during
the actual hostilities, and to substitute more economical facilities.
Many of the War Department’s war factories had been built on leased
sites, and it was necessary to purchase these sites wherever it was
expedient for the Department to retain the factory as a preparedness
asset or where it was good business to buy the land in order to sell
the factory advantageously.
Although few obstacles had been thrown in the way of the War Department
in purchasing property, it was discovered after the armistice that,
because of existing and obsolete laws, it was most difficult to sell
any. Up to the declaration of war the law which controlled this
function provided that war department lands useless for military
purposes should be sold _by the Secretary of the Interior_. When this
law was enacted (1884) most of the lands occupied by the Army had come
from the public domain, and it was logical to turn them back to that
source when the War Department was through with them. In May, 1917,
Congress authorized the War Department itself to sell national guard
target ranges. In July, 1918, Congress authorized the President to
sell, _through the head of any Executive Department_, lands acquired
after the declaration of war against Germany to be the sites of war
factories. In July, 1919, Congress authorized the sale under identical
conditions of lands acquired for storage purposes. These, however, were
the only exceptions granted to the original rule. In fact, when the War
Department went about the purchase of the fourteen cantonment sites
for the possible purpose of selling these lands later and thus getting
better prices for the buildings on them, it did so with the knowledge
that it would take a special act of Congress to authorize such a sale.
Congress, without warning, attached a rider to the appropriation
bill which was approved on July 11, 1919, forbidding the expenditure
of any more money at all in the purchase of real estate by the Army
except at the national guard camps or at the cantonments in use before
November 11, 1918, and also except where the purchase of sites of
industrial plants was necessary to protect the Government’s interests.
The Secretary of War ruled that the fourteen cantonments then being
purchased were exempt from this inhibition, but the law abruptly put an
end to projects of the Real Estate Service to buy some 300,000 acres
at a cost of $8,000,000. At that time the Service was buying 115,000
acres of land at Columbus, Georgia, to serve as an infantry school of
arms, 120,000 acres at Fayetteville, North Carolina, to be an artillery
range, and several other large acreages for various military purposes.
The project to acquire Camp Humphreys, the Engineers’ camp in Virginia
near the city of Washington, about 4,000 acres, was allowed to go
through.
[Illustration:
_Photo from Construction Division_
WEST INDIAN LABORERS EMBARKING FOR HOME]
[Illustration:
_Photo from Construction Division_
VIEW OF CAMP SHERMAN]
On the first day of the armistice the War Department was a party to
leases obligating it to pay $13,000,000 in rentals annually. By the
end of December, 1919, the Real Estate Service had made a large net
reduction in the number of leases, and the annual rent bill had dropped
to approximately $5,000,000, although in that interval the Service had
acquired by lease hundreds of millions of square feet of new storage
space.
[Illustration:
_Photo from Quartermaster Department_
IN AN ARMY RETAIL STORE]
[Illustration:
_Photo from Quartermaster Department_
CUSTOMERS AT OPENING OF ARMY RETAIL STORE]