When the US joined World War I in 1917, Europe had been entrenched in the war for years. While the US had made some preparations for war, they were behind Europe's economy, which had been busy mobilizing troops, creating supplies, and inventing new war technologies.
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Jetzt kostenlos anmeldenWhen the US joined World War I in 1917, Europe had been entrenched in the war for years. While the US had made some preparations for war, they were behind Europe's economy, which had been busy mobilizing troops, creating supplies, and inventing new war technologies.
The US immediately revved up their economy into third gear to get troops, ammunition, weapons, food, and everything else for the war effort shipped to the front lines in Europe. This was a massive undertaking, and it would need some organization. Enter the War Industries Board.
The War Industries Board (WIB) was a government agency created to ensure the United States could produce everything it needed for the war effort. The President at the time, Woodrow Wilson, issued an executive order to create the War Industries Board on May 28, 1918. The Board was up and running by that July. The Board consisted of twelve members, each from a different area of business.
The WIB was one of many boards to oversee specific sections of the nation's economy. Everything needed to run smoothly on both the homefront and the frontline, meaning all industries had to work together.
Even before the US entered the war, the government wanted to prepare materially. There were many aspects of the economy and society that the government needed to be aware of if they wanted to be able to control production. It was from this need that many government agencies were born, one of them being the Council of National Defense and its Advisory Commission.
In May 1916, Congress ratified the National Defense Act. The Act allowed the President broader authority and power during times of war, as seen in this excerpt of the National Defense Act below:
The President, in time of war or when war is imminent, is empowered, through the head of any department of the Government, in addition to the present authorized methods of purchase or procurement, to place an order with any individual, firm, association, company, corporation, or organized manufacturing industry for such product or material...1 - Sec. 120 of National Defense Act, 1916
These powers allowed the executive branch to control the production of raw materials, food, and the railroad system. The founding of the Council of National Defense in August 1916 demonstrated the scope of these new powers. The Council's purpose was to make recommendations to the government about how to proceed with producing war materials. After researching which areas the US would need to manage during wartime, the Council established multiple boards. Each worked in different areas of the economy, including the General Munitions Board, which would later become the War Industry Board.
The WIB and Civil Liberties
During World War I, the government could regulate many things that hadn't been able to before, like labor and farm production. It is argued that the WIB, along with the War Labor Board, was guilty of suspending certain civil liberties.
Furthermore, acts like the Espionage Act of 1918 and the Sedition Act of 1917 curtailed the given rights of Americans. These Acts made it illegal to interfere with the draft process and other actions that the government deemed disloyal.
Soldiers needed uniforms, shoes, guns, ammunition, gas masks, tanks, and ships. It was the job of the War Industries Board to ensure that the United States was able to produce enough of these products. Industrial production increased by 20% during the war, and most of these items were shipped to the front line.
The government essentially took control of the economy to ensure that they were able to be able to produce everything they needed to. The WIB controlled the pipeline of raw materials to ensure that the industries that were essential to the war effort were prioritized before the sectors that were not necessarily essential to the war.
The WIB also worked with companies to encourage their factories to stop making their usual goods and to shift over to making war supplies. Factories were also pushed to find ways to increase production while minimizing their waste. One way factories did this was through the mass production of standardized products.
The companies that the government worked with were private businesses, so they could raise the prices of items needed for the military and the general war effort. Therefore, another essential consideration for the WIB was ensuring costs stayed level. This would keep businesses from price gouging.
Price gouging
When businesses raise their prices to take advantage of a shortage or high demand.
The War Industries Board had three leaders over its lifetime: Frank Scott, Daniel Willard, and Bernard Baruch. The first two leaders left quickly as they found that the WIB could not do much because of the antitrust laws already in place. These issues affected the abilities of the first two leaders of the WIB.
Antitrust laws
Laws created by the government to limit companies from becoming too powerful within the economy and ensure fair competition in the market.
In 1918, President Wilson expanded the abilities of the WIB, which allowed it to be much more effective. This allowed the tenure of Bernard Baruch, the final leader of the WIB, to be much more successful than his predecessors.
President Woodrow Wilson put the Wall Street banker Bernard Baruch at the head of the War Industries Board in March 1918. Since President Wilson expanded the powers of the WIB, Baruch could work directly with industry leaders and prioritize the allocation of raw materials and then the manufacturing of goods.
The creation of the War Industries Board was one of the first times in United States history when the government had the power to intervene with the country's economy. The WIB, along with the other agencies of the Fuel Administration, Food Administration, Railroad Administration, and the National War Labor Board, helped organize each corner of the American economy. Together, they ensured that the homefront economy was doing all it could to supply the war effort with everything it needed.
The War Industries Board was created on July 28, 1917.
The War Industries Board was important because it assisted the US economy and industry prepare and create the materials needed for World War I.
The War Industries Board often found itself blocked by anti-trust laws that were put in place to protect the US economy from monopolies and became more successful after the WIB's authority was expanded in 1918.
The War Industries Board was a government agency that controlled the allocation of raw materials and the production of wartime goods on the homefront.
The War Industries Board affected the economy by encouraging industrial companies to shift their production from what they usually made to goods for the warfront.
True or False: The War Industries Board worked with railroads, farmers, and industries to control production on the homefront.
False. The WIB only worked with industry by allocating raw materials and supervising the production of goods.
Who created the War Industries Board?
President Woodrow Wilson
Who was the most influential leader of the War Industries Board?
Bernard Baruch
The War Industries Board ensured... (select all that apply)
that companies would not price gouge
Why was the War Industries Board not successful initially?
Existing anti-trust laws made it difficult for the WIB to tell companies what to make
True or False: The War Industries Board worked on the war front to make sure soldiers received supplies
False - the WIB worked on the homefront
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