SPECIAL ARTICLES

Business Men Handle

What United States Government is Doing Where Ottawa Can Learn From Washington

John Bayne Maclean January 1 1918
SPECIAL ARTICLES

Business Men Handle

What United States Government is Doing Where Ottawa Can Learn From Washington

John Bayne Maclean January 1 1918

Business Men Handle

What United States Government is Doing Where Ottawa Can Learn From Washington

John Bayne Maclean

A GROUP of old-line politicians—keen capable, unscrupulous and hidebound in tradition—had sought an interview with the man who sits in the White House. This was in the early days of the American entry into the war when the first talk of bringing business men to Washington to help run things was being heard. The politicians came to protest.

“What will these people know about running things down here?” demanded the spokesman. “Let them stay in their factories and get down to their real job —turning out what we’ll need. What do business men know about politics?” * When Wilson first went to the White House, the professional politicians thought he would be putty in their hands. They have found him the hardest proposition to handle that ever entered the executive mansion. He has a cold, analytical way of getting down to the root of things and finding the joker. On this occasion, so the story runs, he gave the protesting deputation a very brief hearing.

“But war is not politics,” he is reported to have said. “War is no longer a military matter, even. It is production, utilization, organization of national resources. This war won’t be won in France, but right at home—in the factories and on the farms.”

UNCLE SAM was slow in getting into the war, in the opinion of Allied sympathizers; but now that he is in he is shouldering his task with grim determination. Observers should not be misled by the characteristic effervescence of the American people which is evidenced in the spread-eaglism of the newspapers and the hysterical output of the song writers. This is pure surface silliness. The real index to American feeling and determination can be found only at Washington where the ribs of a huge war machine are already hewn out and in place. •

Uncle Sam is making mistakes. He is blundering along in some directions and the organization he has built up is far from perfect. But Canadians want to get this through their heads: That we can learn a lot from what he is doing. We have, perhaps, little to learn, in point of national spirit. Canadian determination has been tempered to steel-like hardness in the crucible of adversity. But where Ottawa touches Washington we find that we are already far behind. The object of this article is to show why.

Almost as soon as war was declared the war government at Washington found that it had work for big men. So the big men were secured. Dependence was not placed in the departmental officials nor in the men that political patronage could find. Leaders of industry, business giants, $100,000-a-year men were selected. Edward Hurley, now known as “Hurry Up” Hurley, went to the Shipping Board. Col. Goethals, who built the Panama Canal, was picked to help him. Frank A. Vanderlip left the presidency of one of the largest banks in the world to help McAdoo at the Treasury at a salary of $1 a year. Davisson, one of the Morgan partners, took over the direction of the Red Cross. Now Henry Ford has been drafted to standardize the manufacture of merchant ships. Schwab and Gary, the steel kings, and Bedford of Standard Oil, have worked close to the Government at every stage.

These men along with members of the cabinet called the editors and managers of the trade and technical papers of the U.S. —about 300 of them—to Washington for a conference. They exchanged advice and experiences, and through these papers secured the understanding and hearty cooperation of the financiers, manufacturers and other business men right across the continent—about three and a half million of them.

If these names are not familiar to the Canadian reader, the significance of their connection with the U. S. Government can be conveyed by a translation into Canadian terms. If Ottawa had called into national service such men as Lord Shaughnessy, Sir Edmund Walker, Sir Herbert Holt, C. B. Gordon, we would have had an organization on a par with that at Washington.

BUT the most important feature, after all, was the unique and extremely efficient organization that was built up around the Council of National Defence. The Council was composed of six members of the cabinet headed by Newton P. Baker, Secretary of War, and the work mapped out for it was the complete organization of the immense resources of the country. It developed upon this Council to see that everything was forthcoming that might be needed in the making of war, from men to munitions. The Council achieved a tremendous victory on the first day of their organization. They decided to delegate the bulk of the work to the men who understood it best.

Baker is a business man. He said to his colleagues: “It amounts to this. We’ve got to turn the business of the whole country upside down. Why not let the men who are running business do it themselves?”

So they appointed an Advisory Commission. American industry was divided into seven primary branches. The first was Transportation, and they took Daniel Willard, president of the Baltimore and Ohio Railroad, to look after that part of it. The second was Munitions and Manufacturing, and it was decided that Howard E. Coffin, vice-president of the Hudson Motor Co., was the man for that job. Supplies came next and they reached over to Chicago and drafted Julius Rosenwald, the president of Sears, Roebuck & Co., for that. Then came Raw Materials and Bernard M. Baruch, a famous banker, was secured. Engineering and Education was assigned to Dr. Hollis Godfrey, president of the Drexel Institute. Labor was represented by Samuel Gompers, president of the American Federation of Labor. Mediciné and Surgery was entrusted to Dr. Franklin Martin, secretary of the General American College of Surgeons, Chicago. Walter S. Gifford was made director and Grosvenor B. Clarkson, secretary.

It was a formidable line-up but the Advisory Commission soon discovered one very important fact. The organization of American industry was too huge a task for a commission of seven men. So subordinate committees were

appointed to cover every phase of industry and production. These committees were made up of the leading men in each industry. Howard E. Coffin headed the Aircraft Production Board; F. S. Peabody, a leading coal baron, took the committee on Coal Production; A. VV'. Shaw, editor of System, took the chairmanship of the Commercial Economy Committee; and so on down the line. Roughly speaking, about one thousand of the most successful business men in all were thus drafted into service.

The work they were called upon to do was not in any sense ornamental. Most of the members are in Washington today. Some go down for three or four days a week. Most of them have withdrawn for the time being from the companies with which they were associated. All of them are serving without a cent of pay.

This is their responsibility: They must so organize the branch of industry they represent that, when the Government says, “You must release forty thousnnd men for service in the army,” the men will be forthcoming, and when the Government says, “We must have fifty per cent, of your output,” the fifty per cent, is made available. It is a gigantic task.

There is an interesting story to tell with reference to the housing of this huge organization. There was, of course, no room in the regular government buildings at Washington. The Government had already expropriated every building available to accommodate its

swelling mass of employees. It was suggested that the Advisory Commission be given rented quarters in office buildings; but the rental figures staggered the officials who had the matter in charge.

“We can put up temporary buildings for less than that,” said one official.

“But,” objected another, “these men are on their way to Washington now, hundreds of them. They must have accommodation. The work can’t be delayed —not for a single day.”

“Very welt,” said the first speaker, “get temporary accommodation for them. In the meantime I’ll start in on a new building and I’ll personally guarantee to have it ready in two months.”

It was so agreed and by an early hour that afternoon the permission to use a slice of vacant government land within sight of the White House had been secured—and the contracts for the building had been let. The building was actually finished and occupied within fifty days —an attractive stucco building, with beaver board partitions and pine floors. It is comfortable and efficient, and it represents a saving to the American nation of several hundred thousand dollars.

' I 'HE work accomplished by these committees during the eight months that have passed has not been above criticism. In many respects the organization has been found to be unwieldy, gangling, lacking in cohesion. But on the whole, the achievements have been remarkable. In many instances literal miracles have been brought to pass.

Consider the first striking success scored—the purchuse of copper. The seven members of the Advisory Commission hail gathered around a table and had reached two conclusions. The first was that the Government must break the longestablished Government precedent of paying two ways for everything purchased. Close prices must be the new order. The second conclusion was that a striking example was needed to drive this new idea home.

One can imagine them as they sat about the table, these seven capable men. planning to save billions of dollars for Uncle Sam—“Dan" Willard, silent, dominant, forceful; “Barney” Baruch, big. kindly, with iron nerve; Howard Coffin, dynamic and persuasive; Julius Rosenwald, stocky and rather stolid, with the experience of Sears, Roebuck Department Store buying behind him. They had decided it was necessary to inaugurate the new order with a brilliant coup and were inclined to look to Baruch, as chairman of Materials, for final guidance.

“Copper,” announced Baruch, finally.

It was so decided. The Commission arranged to concentrât«» on the question of copper. Now copper had responded to the war impetus by going sky-high. It was selling around 33 on the market and moreover, was very scarce. Baruch got the wires to work and brought the leading copper operators to Washington for a conference. What transpired during that conference has never been told but it was very much to the credit of the copper men for. as a result, the Commission bought for the Government 45,000,000 pounds of copper at less than half the market price. The saving was exactlv $10.000,000.

The news of this electrifying transaction spread over the country and manufacturers began to do some thinking. Apparently it was going to be necessary to figure close in dealing with Washington. Government purchasing was being handled no longer by politicians. Business men were on the job!

The copner coup had exactly the effect desired. The purchase of materials had been put on a new basis—a combination of horse sense and patriotism. Just one example will do to show what the result of this was. Ship plates were quoted at $lfifl a ton. The Government is buying at $58 a ton !

T T is possible to give an idea of what

the committees have accomplished best, perhaps, by telling in detail what has occurred in certain instances. Take the matter of duck for tentage.

The War Department found quite early in the year that a tremendous amount of duck would be needed to put the troops under canvas in the cantonments all over the country. And then it was discovered that the manufacturers were so loaded with orders that they could not produce more than a fraction of what was needed and that what they could produce was not of the variety required. The problem was such a hot potato for the War Office people that they transferred it promptly to a committee of the National Council.

The committee was most happily constituted. At the head was A. L. Scott, the president of what might almost be termed a cotton architectural firm. His business was to outfit cotton mills, find the capital for them, select locations, devise selling schemes. What he did not know about cotton was not to be found

below the Mason and Dixie line. With him was a waterproofing expert, the retired president of a large concern. There is a tremendous lot of mystery and alchemy about waterproofing—and this man knew it all. Then there were a couple of buying experts. Altogether they were shrewd fellows who had been through the mill and had only one object in mind, to serve the Government absolutely.

First they made a complete census of the looms in the country and gathered figures as to capacities, present and prospective. Then they summoned the manufacturers in groups to confer with them. Mind you, there was no compulsion about it. None of the committees have any actual administrative powers. They must work by persuasion.

First came the tire duck people.

“How much duck can you give us?” they were asked.

The manufacturers, six of them in all, threw up their hands literally as well as figuratively. “We can’t supply the tire people as it is,” they declared. “We’re so far back on our orders that they nearly have us crazy now. How can we do anything for you?”

“And then," they added, "you want supplies in 30'4 -inch widths, and we can only turn out 60% and 90% widths.”

“That,” said Scott, “is our problem. You give us the duck in the widths your plants can turn out and we’ll adapt the Government specifications so that we can

In the course of the discussion it developed that the spring was the rush season for the making of tire duck and that in the fall things slackened off a little. Accordingly the manufacturers elected to continue the rush right through the year and turn over to the committee 25 per cent, of their output. Their regular business would be met by increased efficiency of method—or not met, as the case might be.

Then the carpet people were summoned. Now carpets are not as necessary as tires in war time, so the committee were more harsh with the weavers of duck for rugs. They demanded nearly 50 per cent, of their output, and got it.

Then the committee got busy on the specifications. They studied tents from every angle and finally evolved certain changes that enabled them to use the duck that the tire and carpet mills were producing.

The result of it was that 500,000 soldiers went under canvas this summer!

PERHAPS the most striking results were obtained in the matter of standardization. Diversity of design is regarded as healthy, for the most part, in peace time, but, for war purposes, standardization is the prime need. Consider the motor truck which arms, feeds and moves the modern army. Britain and France have scores of thousands of trucks on the Western front, drawn from all the shops of the world. The result? About a million different repair parts have to be kept back of the lines, because everything in every truck is different. Suppose a shell lights in a truck park and scrambles half a dozen of them. To attempt repairs is an almost impossible task.

It was decided that only one kind of truck would go with the American troops. Accordingly the designing engineers of all the truck manufacturers were summoned to Washington and put into one room. “Go to it, and evolve a perfect truck,” they were told.

Imagine the situation; a score or more of jealous engineers who for years had been feverishly striving to excel each other in the improvement of truck construction. Each man there had shop secrets, exclusive processes, ideas that had been guarded as more sacred than the secret of the Sphynx; and they were asked to co-operate in the production of a perfect truck!

It did not take long for the ice to thaw. First one man laid a shop secret on the table, then another uncorked a hoarded kink and a third explained the nature of a projected improvement. In an hour all the cards were on the table and the group were up to their ears in details and specifications.

To-day every truck manufacturer has handed over to his rivals what was once supposed to be his chief

stock in trade—his secrets of construction. But a truck is being produced for the use of the American army that will be as near perfect as it is possible to go to-day—a truck containing just one thousand parts where nearly two thousand were needed before. Every truck that goes to France will be of that model.

And that is real patriotism.

The same is being done in practically all lines. The Liberty motor was evolved for aircraft by the same method—taking off the shop lid. It is a wonderful advance over everything that has gone before. It is the standardized product.

THEN comes the matter of transportation. The United States is crisscrossed by railroads and electric systems. Some are good, some are bad, some are worse. The transportation of troops and war supplies was a tremendous task when so many roads had to be used. Willard solved the problem by getting the railroads to consent lo a pooling of management A war executive committee of railroad presidents was formed with headquarters at Washington and with absolute powers over evefy railroad in the country.

To attempt to tell what this centralization scheme has done is impossible in a few words. From the military standpoint it made possible the moving of troops on schedule time without seriously disrupting regular traffic. It has resulted in the railroads handling 40 per cent, more freight with an increase in rolling stock of 2 per cent, and in reducing the car shortage at the same time! The past year has seen the most remarkable railroading of all time, and it has been rendered possible by the sinking of all interests in the hands of a controlling board.

Willard accomplished the same result with the telegraph and telephone companies. An operating board in Washington has taken 10,000 miles of system

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Business Men Handle Business End of War

Continued from page 34

from commercial use entirely and handed them over to the Government. It has increased the wires out of Washington from 148 to 294.

IT is possible merely to skim over the surface of what these business men at Washington have accomplished and to tell a story here and there. There are scores of stories that could be told of the results achieved in the matter of economies. A single instance will, however, serve to show how things have gone.

It was deemed very desirable that wool should be saved and Chairman Shaw and his committee worked out a number of ways in which savings could be effected. The matter of swatches was taken up. A swatch is a sample that is sent out to tailors and merchants, attached to a card, for use in showing to customers. It was thought that these could be made smaller and a campaign was inaugurated to influence the clothing manufacturers to that

Grumblings arose. “We want to do all we can,” said the manufacturers. “We’re keen to saYe wool ourselves. We’ll do any sensible thing you ask.

But, in the name of common sense, don’t bother us about such darned picayune things as swatches!”

The trade, in fact, was inclined to laugh. Swatches! Little, dinky, noaccount scraps of cloth. Give them a chance to work on something big in an economical way. Then they would show what they could do.

However, the campaign bore fruit and the size of swatches was reduced. The result up to October 1 was an actual saving of enough wool to make uniforms for 57,000 infantry troops!

If time permitted the story might be told of how returns of bread from stores were cut off and enough waste prevented in that way to conserve flour to the extent of 600,000 barrels a year.

SPACE, however, is limited and it is not possible to do further than to briefly enumerate the results that the business men committees have achieved: The very general acceptance by labor and capital of the suggestion of the Council that existing labor standards should not be changed until the need for such

action had been determined by the Council, with the steadying influence on industry growing out of such action.

The procurement of raw materials for the use of the military and naval forces of the United States at prices greatly below the current market price, this being made possible by enlisting the patriotic co-operation of industrial leaders.

The completion of the inventory, for military purposes, of American manufacturing plants.

The saving to the Government of millions of dollars by the proper co-ordination of purchases through the agency of the General Munitions Board of the Council of National Defense, this Board being later absorbed by the War Industries

The organization of the agricultural newspapers to work in conjunction with the Secretary of Agriculture for greater and more efficient production. *

The mobilization of the 262,000 miles of railroads of the country for the Government’s defense.

The close-knit organization of the telephone and telegraph companies of America to insure to the Government the most rapid and efficient wire communications.

The creation, under the Medical Section of the Council, of a General Medical Board, consisting of many of the most highly qualified surgeons and physicians of the country.

The selection by the same section of thousands of doctors specifically qualified for membership in the Medical Officers’ Reserve Corps, and the standardization, far on its way to completion, of surgical instruments and supplies.

The creation by the Council of the Aircraft Production Board, which developed the Liberty motor, and which, in cooperation with the U.S. Signal Corps is setting out to establish a great American air service at the earliest possible moment.

The results obtained by the Council’s Committee on Coal Production in the procurement and expeditious shipment of coal, both in the civilian and federal interests.

The saving to the Government of millions of dollars through the application by the Committee on Supplies of the Council of the most modern business methods in the purchase of supplies for the War and Navy Departments, largely through the elimination of middlemen.

The work performed by the Council’s Committee on Emergency Construction and Contracts in enlisting the best building and architectural experts of the country for the erection of the cantonments for the national army. In this they were greatly assisted by Canadian experience.

The successful initiation of a movement to co-ordinate activities on the part of the states of the Union for the national defense, brought to a clear and workable focus by a conference of states held in Washington at the call and unt^r the auspices of the Council, which movement has reached a high point of organization under a special section.

The organization of a railroad committee which was sent to Russia.

The enlistment of reserve engineer regiments to aid in rehabilitating the railroads of France.

The creation by the Council of the War Industries Board to assume the duties formerly discharged by the General Munitions Board and to act in addition as a clearing house for the war industry needs of the Government. Under this

board are handled vital war matters having to do with raw materials, finished products, and priority. A commission of this board is authorized to arrange purchases in accordance with general policies formulated and approved. The board recently made the arrangements with the copper and steel producers to fix the price for their commodities, announcement thereof having been made by the 1’resi-

The carrying on by the Commercial Economy Hoard of the Council, with the co-operation of the business press, merchants, manufacturers, and consumers at all points, of successful campaigns for conserving wheat, wool, and other commodities in which there have been shortages and for reducing the amount of labor employed on non-essential services in trade.

The creation by the President, at the request of the Council, of a labor commission to aid in the adjustment of social and labor disturbances throughout the country, particularly in the Western States.

The creation by the Council of a Woman’s Committee, which is enlisting the woman power of America for the prosecution of the war.

The pronouncement by the Council through the Secretary of War, its chairman, of a policy to the effect that all effort should be centered to help win the war, this pronouncement having been made in response to queries as to the attitude which should be taken relative to improvements, public and otherwise, involving large construction work.

The creation, in little more than 30 days, through the Automotive Products Section of the Council and the Society of Automotive Engineers, in co-operation with the Quartermaster’s Department of the army, of the standardized U.S. heavyduty war truck.

The mobilization, in short, of the industrial forces of the country for war, the act of Congress creating the Council having made it mandatory upon the latter to bring about “the creation of relations which will render possible in time of need the immediate concentration and utilization of the resources of the nation.’’

'"PO go through the building that serves A as headquarters for the committees is a revelation. There are several thousand on the staff altogether and only eightv are paid, for the most part clerk's and stenographers. The man who takes your card at the door—courteous, affable, capable—is a retired wholesaler of very comfortable means. He is “doing his bit.’’ He is on duty from 9 until 5 and he works hard.

In small offices with temporary partitions are men who ordinarily sit behind mahogany desks with batteries of secretaries to conserve their valuable time. They work hard and they observe discipline. Break in on any one of them with a request for information and he will refer you politely to the head of his committee and the chairman in turn will refer you to Grosvenor Clarkson. Mr. Clarkson is a young man who typifies accurately the popular conception of the American super-business man. He is quick at decisions, dynamic, has his work at his finger tips, knows evervthing that is going on. Generally he will tell you what you want to know, for the haze' of mystery that most Government officials like to wrap about them has been discarded here. Business men are accustomed to working in the open.

Business men of Canada and of the United Kingdom are just as public-spirited and self-sacrificing as are their contemporaries in the United States. Many of them offered their services, but were snubbed or neglected by the political leaders excepting Mr. Lloyd George in England, and Sir Thomas White here. The Kaiser has so far beaten us in the war and in diplomacy because he encouraged and called in the specialists of his Empire.

When Sir Robert Borden told the Minister of Agriculture in 1914 that he must organize the country and produce more from the farms he did not call in the successful farmers who knew how. Instead Mr. Burrell hired a party hack to write a book on “Patriotism” and sent an army of party spell-binders to exhort the farmers on “Patriotism and Production.” Their ignorance gave the farmers great offence, and acreage failed to increase.

The Minister of Trade, the Minister of Labor, the late Minister of Immigration, the late Minister of Fisheries, ran their departments on similar lines. That is, they refused the advice and services of the great experts of the country. They failed, and are out of the Cabinet or ought

When Sir Thomas White wanted to sell $150,000,000 worth of bonds in Canada, all precedent demanded that he should seek the advice of the professional politicians, and place the bonds through their party friends. Instead, he called in the experts, the successful specialists, whose life-work is selling bonds. The Chairman of the Bond-dealers’ Association, A. E. Ames, was made National Director. They got over $415,000,000. A marvellous result. More wonderful still is the splendid organization that was built up, and the national public spirit that it engendered. But most important of all is the great object lesson the Finance Minister’s policy gives to Canada and the Mother Country. It confirms the wisdom of the Kaiser and

President Wilson in calling the great executives and experts of their countries to co-operate with their governments in carrying on the war.

When the war broke out the one important thing Germany was short of was cotton. This was well known to the members of the International Cotton Association, one of the most perfect business organizations in the world. A number of the most able business men called upon Asquith and Grey, pointed this out and urged that cotton for Germany be declared contraband of war. They were told their suggestion was absurd, that it was impossible to carry it into effect; nothing was done and Germany bought all the cotton in sight. For a year it poured in through Italy, Holland and other neutral countries. Finally in September, 1915, an indignation meeting of big business men was held in London. Thev talked plainly and strongly to Grey. Within a week the British Government made cotton contraband. Experts whose opinion is worth while say that if the Asquith-Grey crowd had listened to and not ignored the urgent representations of the British business men the shortage of cotton would have compelled Germany to seek peace in six months.

The situation at home is very sad and depressing. Family and party influence keep petty brains and fearful failures like Admiral Jellicoe in office instead of giving them peerages and getting them out of the way, and seek to handicap big successes like Geddcs. One wonders how much longer the Americans will consent to leave the management of the war in the hands of the pig pen provincialists, as Professor MacNaughton of McGill, described them the other day. Geddes, who is a young business man who has been accustomed >to things done, not talked about, seems to be our only big find of the war.