By Kevin C. Murphy, Copyright 2013. All Rights Reserved.
Chapter Three: Chaos at Home
Progressives in the Crucible of 1919
V. The Wheels Come Off
Even as Wilson carried to Paris a vision of a new international postwar order, he seemingly held no similar blueprint for the national life. Even in his administration, thinkers like Robert Brookings of the War Industries Board and Felix Frankfurter at the War Labor Policies Committee had assembled plans to ensure a soft landing for the post-war economy. Instead -- and perhaps, one historian has speculated, for fear of "conservative businessmen…gain[ing] control of the machinery, if not in the immediate future, certainly after he went out of office," his administration set about dismantling their wartime apparatus as rapidly as possible. As Wilson told Congress in December of 1918, "Our people do not want to be coached and led:
They know their own business, and are quick and resourceful at every readjustment, definite in purpose and self-reliant in action…I have heard much counsel as to the plans that should be formed…but from no quarter have I seen any general scheme of 'reconstruction' emerge which I thought it likely we could force our spirited businessmen and self-reliancy to accept with due pliancy and obedience.2And so, on November 12th, even as the ink dried on the Armistice treaty, war contracts were cancelled en masse - More than half of the $6 billion in outstanding contracts were canceled within four weeks, and these only allowed for up to 30 day's further operation at the current production rate. The day after that, the WIB began dismantling its price control systems. In December, the United States Housing Corporation was told by Congress to stop work on all buildings that were not 70 percent finished. Meanwhile, 600,000 men returned home from France right away, and the entire 4,000,000 man American Expeditionary Force would return to civilian life within the year.3
In other words, the labor markets were being flooded with returning soldiers at exactly the same moment that industries were scaling back their production and laying off workers. Within six months, production had dropped by 10%, and unemployment surged to 12% All of this occurred after eighteen months of heady, patriotic promises made to laborers for their amiability and their output.4
And even as men lost jobs - or returned home without one -- the cost of living remained stratospheric. Food costs leaped 84%, clothing 114.5%, furniture 125%. For the average American family, the cost of living was 77% higher in 1919 than before the war, and 105% higher in 1920. In total, inflation averaged 14.6% for 1919 and just under 9% for the first six months of 1920. "[W]e have now almost reached the breaking point…I do not see how we can very long continue under present conditions of living costs," fretted Senator George Norris, who thought the issue posed "very great danger to the stability of the Government itself."5
Then as ever, the cost of living was a hugely impactful political issue, and politicians begged Wilson to do something about it. "Where there is one man in a thousand who cares a rap about the League of Nations," wrote one Midwestern Congressman, "there are nine hundred and ninety-nine who are vitally and distressingly concerned about the high cost of living." Similarly, twenty-six Massachusetts Democrats implored Wilson to take action against high prices, "which we consider far more important than the League of Nations."6
As we have seen, for Wilson, nothing was as important as the League, and these pleas to do something, anything, about the economy fell on deaf ears. Even his secretary, Joe Tumulty, could not get through to him: "You cannot understand," he cabled the president in desperation in May 1919, "how acute situation is brought about by rising prices of every necessity of life." Eventually a humor magazine called Life began to badger Wilson with a fake series of cables to "Wilson, Paris" from "The American People": "Please hurry home and look after the labor situation." "Please hurry home and look after the railroads." "Please hurry home and fire Burleson." "Please hurry home. Let someone else do it." Wilson, of course, did not - and, within two months of his ultimate return, he was felled by the stroke that would incapacitate him for the remainder of his presidency.7
Nor could Wilson's wartime machinery work to ease the landing for the American economy. For his part, Bernard Baruch announced in December 1918, a month after the Armistice, that the War Industries Board would be disbanding effective January 1st, 1919. Not only would Baruch resign on that day (and head to Paris, compounding the leadership vacuum stateside), but "all the rules, regulations and directions of every nature whatsoever issued…are hereby canceled and all pledges heretofore made…are hereby revoked." By the first day of 1919, the WIB experiment was at an end.8
So too, for all intent and purposes, was the Committee on Public Information. While the CPI continued work overseas through the middle of June, and officially disbanded in August, it ended all operations within the United States on Armistice Day. As New York World editor Frank Cobb put it a December 1919 address to the Women's City Club, "When the Armistice was signed…public opinion was demobilized too. It was turned loose to shift for itself and, naturally, it felt a little awkward in civilian clothes. It had been trained to think only in terms of war and had almost forgotten how to think in terms of peace…It was in the habit of being told what to think and what to feel, and when it was left to its own resources it was bewildered."9
Before the Committee disappeared in the mists of history, however, one of its final works would set the stage for the hysteria to come. In October of 1918, only weeks before the end of the war (and a month after 5000 American troops had landed in Archangel, Russia as part of the Polar Bear expedition), the CPI published The German-Bolshevik Conspiracy, a report which declared that "the present heads of the Bolshevik Government - Lenin and Trotsky and their associates - are German agents" and that "the Bolshevik revolution was arranged for by the German Great General Staff, and financed by the German Imperial Bank and other German financial institutions."
These charges were buttressed by a number of papers in the report purportedly smuggled from the Soviet Union by CPI agent Edgar Sisson. Debate over the Sisson papers' authenticity began almost immediately after their publication and would rage for decades, with Russia expert George Kennan declaring them forgeries in 1956. But by suggesting a conspiracy between Germans and Bolsheviks, the CPI laid the groundwork for the shift in collective emphasis that would soon become the Red Scare. "At this point," Frank Cobb noted grimly to the women of New York, "private propaganda stepped in to take up the work that Government had abandoned."10
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2. Noggle, Into the Twenties, 51. The historian in this case is Wilson biographer Arthur Link, as quoted in John A. Garraty, Interpreting American History: Conversations with Historians (New York: Collier MacMillan, 1970).. Wilson quoted in David Montgomery, The Fall of the House of Labor: The Workplace, the State, and American Labor Activity, 1865-1925 (Cambridge: Cambridge University Press, 1989), 392.
3. George Soule, Prosperity Decade: From War to Depression, 1917-1929 (New York: Harper & Row, 1968), 81-82. Murray, Red Scare, 5-6.
4. Murray, Red Scare, 6. Pietrusza, 142.
5. Murray, Red Scare, 7. Brown, 3. Bagby, 22. Pietrusza, 142. Soule, 84. Lowitt, 126.
6. Coben, 162. Nell Painter, Standing at Armageddon: The United States 1877-1919 (New York: W.W. Norton & Co., 1987), 367. Pietrusza, 143.
8. "All Priorities Near End," The New York Times, December 20, 1918.
9. Frank Cobb and John Heaton, Cobb of "the World": A Leader of Liberalism (Hallandale: New World, 1971), 331.
10. Hagedorn, 54. The Committee on Public Information, The German-Bolshevik Conspiracy, October, 1918. Available at www.archive.org/stream/germanbolshevikc00unit/germanbolshevikc00unit_djvu.txt. Cobb and Heaton, 331.
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