Wilson

by A. Scott Berg

  With sanitation facilities crude at best, the soldiers were subjected to every imaginable disease, from nephritis to pneumonia along with trench fever (a form of rickets) and trench foot (similar to frostbite). Rats were rampant, dangerous for the parasites and diseases they carried; lice bred beyond control. “Shell shock” became a familiar auditory and psychological affliction; and corpses tangled in barbed wire became a common sight. Poetry now reflected a discernible shift in tone, as much of the early idealism succumbed to grotesque reality.

  And then appeared the Fourth Horseman of the Apocalypse—Pestilence. During the unusually cold winter of 1918, a lethal influenza spread, evidently from Camp Funston, Kansas. With some fifty thousand men in close quarters, most of them shipping out overseas and scattering across Europe, only to share crowded unsanitary foxholes, the war created a global Petri dish for a pandemic. Within a year, the Spanish flu—as it came to be called because Spain’s King Alfonso XIII became its most publicized survivor—would be responsible for half the deaths of American soldiers. Lasting four centuries, the Black Death had killed 75 million people. This outbreak of influenza would infect a billion people, killing 100 million of them.

  War inflates peacetime numbers, particularly economic statistics. A military workforce in the millions, supported by thousands of new bureaucracies—from draft boards to the National Screw Thread Commission—had to be funded. “I now had to face the prodigious problem of war financing,” recalled Treasury Secretary McAdoo. “With each fresh calculation the sum had grown larger, and the figures were appalling. There were so many uncertain factors in the problem that a definite conclusion was not possible.” But McAdoo realized that he had to generate several billion dollars within a few months. His predecessor during the Civil War, Salmon P. Chase, had been afraid to appeal to the people for money, and so he relied heavily on private bankers and agents to sell bonds; McAdoo considered this a fundamental error. “Any great war must necessarily be a popular movement,” he believed. “It is a kind of crusade; and, like all crusades, it sweeps along on a powerful stream of romanticism.”

  The day after the war was declared, McAdoo went to Congress to confer with members of the House Ways and Means Committee and the Senate Finance Committee. He submitted a draft of a bill seeking authorization to issue $7 billion worth of bonds. “The request for such an enormous amount of money startled Congress and the country,” McAdoo recalled. But he explained that he did not intend to offer the entire batch of bonds at once. He also detailed the importance of sending $3 billion as loans to the Allies—“substitutes for American soldiers” until they had actually arrived. North Carolinian Claude Kitchin, Majority Leader and chairman of the House committee, noted that the bill contained “the largest authorization of bond issues ever contained in any bill presented to any legislative body in the history of the world.” With near unanimous support, it passed both houses of Congress within two weeks.

  Selling bonds became one of the great morale builders during the war. Business was good enough that anybody with money could earn a higher rate of interest from other financial instruments; but the Administration literally capitalized, as McAdoo said, on “the profound impulse called patriotism.” They took the campaign to the people—farmers and factory workers and millionaires alike—giving every citizen an opportunity to serve the country by investing in it. After consulting with several business titans, particularly two of the nation’s leading financiers—J. P. Morgan and Paul M. Warburg—McAdoo settled on $2 billion at a 3.5 percent rate of interest, high enough to maximize widespread participation but low enough to minimize the government’s burden. Calling them “Liberty Loans,” he embarked on a four-week speaking tour to drum up subscribers. With the support of the major banks, the Four Minute Men, women’s clubs, and politicians of all persuasions (with the notable exception of Ohio’s Republican Senator Warren G. Harding), and with newspapers and billboard owners and advertising agencies offering free services, the First Liberty Loan drive ended after one month, oversubscribed by more than $1 billion. Four million citizens had invested, 99 percent of them paying from $50 to $10,000. On May 31, 1917, the President invested $10,000. In order to give the Treasury greater flexibility by not requiring approval each time it needed to float a bond—and to empower Congress with control over the amount of moneys the nation could borrow—in September 1917, Congress created a limit it called a “debt ceiling,” this first one set at $11.5 billion.

  Three more drives followed over the next fifteen months. McAdoo had been so unsure about the first bond issue that Congress had exempted the income the bonds produced from all but inheritance taxes. Now he returned to Congress to suggest that surtaxes be applied in certain instances. To ensure the success of these subsequent campaigns, Washington called upon the nation’s most powerful new sales force—movie stars. In the last five years, a Los Angeles community of orange groves and pepper trees had blossomed into Hollywood, the home of one of the most lucrative industries in the nation; and its famous players did whatever they could to boost the war effort—appearing at benefits, drawing publicity, and raising spirits as well as money. After Wilson received Charlie Chaplin, Mary Pickford, and Douglas Fairbanks at the White House, they accompanied McAdoo on his bond tours and turned throngs of fans into subscribers wherever they went. Sometimes the crowds grew too vast to hear the stars talk, and the actors resorted to their pantomime skills in encouraging the public to invest in the nation. On one tour, stone-faced cowboy William S. Hart crammed rallies in nineteen cities into ten days and sold $2 million worth of bonds. The four Liberty Loan campaigns raised $17 billion. By then the Victory Liberty Bond Act had raised the debt limit to $43 billion, far above the $25.5 billion in total federal debt.

  McAdoo had never intended for bonds to finance the entire war; he believed the “soundness and stability” of America’s financial structure depended on raising not less than one-third of its expenditures through taxation. The Revenue Act of 1916 sought to raise $200 million, more than half derived from the income tax; the basic rate inched from 1 percent to 2 on annual incomes over $3,000, and there was a surtax of 6 percent on incomes over $500,000 that slid upward to 13 percent on incomes over $2 million. The next year, the United States experienced the sharpest spike in its tax history. A 2 percent tax was imposed on incomes of $1,000, with graduated surtaxes amounting to as much as 67 percent in the cases of multimillion-dollar incomes; this not only generated more revenue but enrolled more taxpayers. Congress introduced excess-profits taxes—8 percent on businesses and individuals earning more than $6,000 annually. In the years just before the war, hundreds of employees of the Bureau of Internal Revenue had collected $280 million annually. After America entered the war, ten thousand workers collected $2.8 billion.

  On May 23, 1918, McAdoo urged a higher tax on profits generated by war industries, an increase in the income tax on unearned incomes, and a heavy tax on luxuries. The only reasons to challenge the legislation, said McAdoo, were political. Congressional elections were less than half a year away, and he noted that many members had told him they were worried that such taxation would result in the Republicans seizing the House of Representatives. McAdoo said he felt the fear was “ill-founded.” He believed the electorate would have more respect for those representatives who were willing to announce their positions than those who dodged the issue. Either way, he asked the President, “how can we allow any political consideration to stand in the way of our doing the things which are manifestly demanded to save the life of the Nation?” The question launched what would become a perennial debate between people who insisted that businesses—the very people who invested in the growth of America—were being treated unfairly and those who contended that the redistribution of wealth was not only equitable but stimulative to the economy. Between 1917 and 1918, the nation’s gross domestic product grew from $60 billion to $75 billion; and the federal deficit—that is, the amount by which government expenditures exceed
ed revenues—shot from $1.1 billion to $9 billion.

  On May 27, Wilson appeared briefly before another joint session of Congress and presented the facts as McAdoo had laid them out. Winning the war was paramount; hundreds of thousands of America’s men—“carrying our hearts with them and our fortunes”—were hastening to Europe; there could be “no pause or intermission” in their crusade; and that required raising additional moneys. “Only fair, equitably distributed taxation . . . drawing chiefly from the sources which would be likely to demoralize credit by their very abundance,” he said, “can prevent inflation and keep our industrial system free of speculation and waste.”

  “No new taxes” would later become an evergreen American political slogan; but Wilson proposed the exact opposite. He insisted it was the government’s duty in that moment to introduce new taxes and raise the old ones. While no elected official ever wanted to take such a position, the President exhorted Congress to embrace the challenge. That required a major concession on all their parts, which he audaciously presented in a slogan of his own: “Politics is adjourned.”

  Both houses of the Sixty-fifth Congress had cooperated with the executive branch in enacting Wilson’s vigorous wartime agenda, and so he reluctantly asked them to extend themselves further by abrogating the very essence of their existence—the playing of politics. So long as they were waging war, the President of the United States blandished, “the elections will go to those . . . who go to the constituencies without explanations or excuses, with a plain record of duty faithfully and disinterestedly performed.” Whether one agreed with the President or not, his rousing speech offered a profile in courage.

  Debate extended for several months, though it would prove nearly impossible to resist a Commander in Chief who spoke with such unabashed patriotism. “Have you not felt the spirit of the nation rise and its thought become a single and common thought since these eventful days came in which we have been sending our boys to the other side?” he asked that May. He believed Americans were so united in their resoluteness to win the war, they would undergo any sacrifice toward that end. “We need not be afraid to tax them,” Wilson added, “if we lay taxes justly.”

  The great variable in the equation, of course, was in the definition of the word “justly.” McAdoo favored taxing “war profits,” as the chemical and the steel industries, for example, were benefiting hugely from the conflict. He pointed out that the Allies borrowed about $9.5 billion from America during the war years, but they spent close to $12 billion there in that period. Most of that money went to munitions-makers, who were notorious profiteers. McAdoo estimated that gains from war profiteering amounted to close to $3 billion. In the meantime, progressive Representative Kitchin targeted “excess profits.” He noted that that such companies as Ford, Standard Oil, and American Tobacco had been earning excessive profits before and during the war and deserved to be taxed accordingly after the war. Henry Cabot Lodge cautioned that so much taxation would curb future investment, thus generating less in income taxes and keeping average Americans from buying Liberty Bonds. Such debates would last months as well, but Wilson still had no compunction asking for these new revenues. After all, he said in his speech on May 27, 1918, “Just as I was leaving the White House I was told that the expected drive on the western front had apparently begun.”

  • • •

  From the moment he landed in London, it had been General Pershing’s plan to hang fire until he had mustered a substantial enough force to win the war. Before late May 1918, American troops had barely muddied their boots, obtaining only occasional battle experience. Because of the exigencies of the spring offensive, Pershing temporarily allowed Marshal Foch to intersperse some of his troops among the combined British and French forces. Then, on May 28, 1918, some 3,500 soldiers of the 28th Infantry Regiment of the U.S. 1st Division took offensive action in a small battle at Cantigny, seventy-five miles north of Paris. Assisted by French airplanes above and tanks on the ground, the Americans overtook the town and advanced into German-held territory in a matter of hours. Beyond the military victory was the psychological boost. This small band proved that Americans knew how to fight, and it offered a preview of what millions of robust doughboys could do. The Battle of Belleau Wood lasted almost the entire month of June and ended in an American victory. The Yanks won again in July at Château-Thierry. By August, Foch decided to take advantage of the shift in momentum and commence his own offensive, one that would last the next hundred days. The Allied armies fought in the Battle of Amiens (the first day of which Ludendorff called “the Black Day of the German Army,” as a massive arrival of British tanks allowed the soldiers to emerge from the trenches to fight), the Battles of the Somme, the Battle of the Argonne Forest, and at St. Mihiel, where the Americans won another decisive battle.

  Even Winston Churchill, chary in praising outsiders, could not help acknowledging the vitality the Americans brought to the bloody battlefields. He would later cite a Frenchman’s account of country roads suddenly filled with that “inexhaustible flood of gleaming youth in its first maturity of health and vigour.” Backhanded though the compliment may have been, he added, “Half trained, half organized with only their courage and their numbers and their magnificent youth behind their weapons, they were to buy their experience at a bitter price. But this they were quite ready to do.” According to one military historian, the American Expeditionary Force “seized 485,000 square miles of enemy-held territory and captured 63,000 prisoners, 1,300 artillery pieces, and 10,000 mortars and machine guns.”

  In the words of Woodrow Wilson, “Our men went in force into the line of battle just at the critical moment when the whole fate of the world seemed to hang in the balance and threw their fresh strength into the ranks of freedom in time to turn the whole tide . . . so that henceforth it was back, back, back, for their enemies, always back, never again forward!” In short order, “the commanders of the Central Empires knew themselves beaten.” But Churchill was right about the bitter cost. While the decisive streak of American military victories was not exactly Pyrrhic, it was pricey. In 150 days of combat, the AEF suffered the loss of 116,516 soldiers and sailors, almost half of whom died in combat, while most of the rest succumbed to influenza; another 204,002 were wounded; and 3,350 men were reported missing.

  Half those losses came in the first six weeks of the fall of 1918 in the Argonne Forest, a dense wood next to the Meuse River, where the United States fought the largest battle in its history, before or since, with 1.2 million soldiers. It would result in the deaths of 26,277 Americans, more than had ever died in a single battle. There Alvin York, a sergeant born in a log cabin in Tennessee, led an attack on a machine gun nest, which resulted in the killing of 28 Germans and the capture of 132 more, rendering him a symbol of American heroism. Captain Harry Truman of Independence, Missouri, led a battery that supported the tank brigade of George S. Patton, without losing a single man. He would return Stateside and become a haberdasher. And overhead, an Indianapolis 500 racecar driver from Ohio named Edward Rickenbacker was becoming one of the war’s flying aces. American, French, and German casualties totaled 300,000 in the Meuse-Argonne offensive.

  The war fomented great social change, as it imbued the nation with moral force and generated economic growth. On foreign battlefields, soldiers with roots in more than fifty different nations came together, as bankers shared foxholes with bums. Historian and future Yale President Charles Seymour observed that “the youthful plutocrat saw life from a new angle, the wild mountaineer learned to read, the alien immigrant to speak English.” Materially speaking, the gross domestic product of the United States had doubled since 1914—to $75.8 billion—with half that rise coming since America’s entrance into the war; and the gross public debt had almost trebled, to $14.6 billion. More than the steel and explosives industries benefited. Gillette, to name but one company, signed a deal with the government to produce 3.5 million razors, to be shipped to all enlisted
men. With the muscle of the American workforce—its young males—largely in uniform, unemployment reached record lows, halving to 3 percent in 1918, some months dipping below 2. More women worked outside the home than ever before. Typewriters and telephones created a demand for clerical workers and operators, jobs deemed appropriate for them. The need for workers in the industrial North—notably Chicago, Cleveland, and Detroit—caused a migration of African Americans from sharecropping farms in the South. Even “colored girls” were able to find nondomestic work. But racial hatred and segregation persisted.

  Less than a week after Congress had declared war, the President heard from the black pastor of Shiloh Baptist Church in Washington, D.C. He reminded Wilson that “the Colored people” accounted for one-tenth of the American population and that the time had come for their President to assure them that he and his administration desired their “hearty, united and enthusiastic support in carrying on the War” and that “no discrimination or injustice will be practiced by the Government.” Days later, Wilson received a more stringent document from the Boston branch of the National Equal Rights League, signed by William Monroe Trotter, his former adversary, who suggested that the war allowed for some progressive social reordering. “There is need no longer of subjection of Americans to the race prejudices of fellow Americans,” insisted the long proclamation. “In the presence of a common danger and a common obligation, with a war devastating Europe caused by racial clannishness and racial hatred . . . let the United States of America and the people thereof give up race proscription and persecution at home.” In short, they entreated Wilson to give the same encouragement for volunteering or enlisting to all Americans “by vouchsafing the same free chance to enlist, to rise by merit, and on return home, the same right to civil service, and to civil rights without bar or segregation.”