War Industries Board

The War Industries Board (WIB) was a United States government agency established on July 28, 1917, during World War I, and reorganized in 1918 under the leadership of Bernard M. Baruch. The organization encouraged companies to use mass-production techniques to increase efficiency and urged them to eliminate waste by standardizing products. The WIB set production quotas and allocated raw materials. It also conducted psychological testing to help people find the right jobs.

The WIB also dealt with labor-management disputes resulting from increased demand for products during World War I. The government could not negotiate prices and could not handle worker strikes, so the WIB regulated the two to decrease tensions by stopping strikes with wage increases to prevent a shortage of supplies going to the war in Europe.

Under the WIB industrial production in the U.S. increased 20 percent. As a result, retail prices soared, almost doubling between 1914 and 1918.The War Industries Board was decommissioned by an executive order on January 1, 1919.

With the war mobilization conducted under the supervision of the WIB, unprecedented fortunes fell upon war producers and certain holders of raw materials and patents. Hearings in 1934 by the committee of U.S. Senator Gerald Nye were intended to hold war profiteers to account.

Members of the War Industries Board

*Clarence Dillon owned a majority share of Dillon, Read & Co., an investment banking powerhouse that ranked alongside J.P. Morgan & Company and Kuhn, Loeb & Co.. During World War I, WIB chairman Bernard Baruch asked Dillon to be assistant chairman of the WIB. Dillon was also director of American Foreign Securities Corporation, which he had set up in 1915 to finance the French Government’s purchases of munitions in the United States. Clarence Dillon is the father of C. Douglas Dillon who was director at U.S. & Foreign Securities 1937-63, chairman Dillon Read 1946-53, Ambassador to France 1953-57, under Sec. State 1958-60, helped Bechtel Corporation obtain Arabian contracts (Bechtel later bought out his family firm, Dillon Read), Secretary of Treasury 1960-65, Brookings Institution president 1960-1961, Hoover Institution trustee, Heritage Foundation trustee. His daughter is Princess Joan of Luxembourg, who married into family who are direct descendants of William of Orange who chartered the Bank of England.

*Robert S. Brookings was appointed to the WIB by President Woodrow Wilson in 1917. Brookings was later named chairman of its Price Fixing Committee of the WIB. In this role, he was the liaison between the U.S. government and many different industries. A St. Louis merchant and head of the Cupples Co. which revolutionized the distribution of goods from railway stations, Brookings founded the Brookings Institution. An original trustee of Carnegie Endowment for International Peace, Brookings set up the Brookings Graduate School of Economics, which merged with the Institute of Government Research and the Institute of Economics in 1927 to form the present Brookings Institution. It is listed as "not a membership organization", whose goal is "to set national priorities", in short, to make government policy, which it does. It rode into power with Franklin D. Roosevelt's New Deal, hardly a surprising development, since its incorporator, Frederic A. Delano, was FDR’s uncle. The Brookings Institution has always been the forum of the world’s most powerful financiers.

*Samuel P. Bush, father of Prescott Bush, grandfather of George Herbert Walker Bush (another Bonesman) and great-grandfather of George Walker Bush (another Bonesman), became chief of the Ordnance, Small Arms and Ammunition Section of the WIB in spring 1918, taking national responsibility for government assistance to and relations with weapon companies, including Remington Arms Company, run by Skull and Bones member Percy Avery Rockefeller. This was an unusual appointment, as Bush seemed to have no background in munitions, having been in the railroad business supplying equipment to the Wall Street-owned railroad systems, including railroads controlled by E. H. Harriman. Later in 1918 Bush became director of the Facilities Division of the WIB. Before joining the WIB, Bush had been General Manager of Buckeye Steel Castings, the makers of railcar parts, which was run by Frank Rockefeller, the brother of oil magnate John D. Rockefeller. Samuel Bush's wartime business relationships would continue after the war, and it's believed these relationships would especially aid his son Prescott Bush's career of service to Brown Brothers Harriman & Co..

*Robert S. Lovett, President of Union Pacific Railroad, chief counsel to E.H. Harriman and executor of his will, was in charge of national production and purchase "priorities" for the WIB. Interesting here, because E.H. Harriman had gained control of the Union Pacific Railroad in 1898 with credit arranged by William Rockefeller, Percy's father, and by Kuhn, Loeb & Co.'s British-affiliated private bankers, Otto Kahn, Jacob Schiff, and Felix Warburg. And even more interesting, because Robert A. Lovett son of Robert S. Lovett and a close friend of Prescott Bush became a partner in Brown Brothers Harriman, with other partners including W. Averell Harriman (another Bonesman and son of E. H. Harriman), his brother E. Roland Harriman (another Bonesman) and Prescott Bush (another Bonesman). Robert A. Lovett would later serve as Assistant Secretary for Air during World War 2, Under Secretary Of State 1947-1949, Rockefeller Foundation trustee 1949-1961, Deputy Secretary of Defense 1950-1951 and Secretary of Defense 1951-1953.

*Eugene Meyer was a Special Advisor to the War Industries Board on Non-Ferrous Metals (gold, silver, etc.) In 1915 he had entered a partnership with Bernard Baruch in the Alaska-Juneau Gold Mining Company. Meyer was Special Assistant to the Secretary of War on aircraft production. In 1917 he was appointed to the National Committee on War Savings, and was made Chairman of the War Finance Corporation from 1918-1926. He then was appointed chairman of the Federal Farm Loan Board from 1927-29. He served as Federal Reserve System chairman from 1930 to 1933. Meyer must have been a man of exceptional ability to hold so many important posts. However, there were some Senators who did not believe he should hold any government office, because of his family background as an international gold dealer and his mysterious operations in billions of dollars of government securities in the First World War. In 1933 he bought the Washington Post. After World War II, Harry Truman named Meyer, then 70 years old, to be the first head of the World Bank in June 1946. He was the father of publisher Katharine Graham.

*Edward Stettinius, Sr. served on the WIB during the First World War. A native of St. Louis, he had been active in many business enterprises, he became president of the Diamond Match Company (1909-1915), a partner in the banking house of J.P. Morgan & Co.. His son Edward Stettinius, Jr. was head of the Lend-lease aid to the Allies, Undersecretary of State in 1943, and Secretary of State 1944-1945. In addition, junior Stettinius was chairman of the US delegation to the United Nations Conference on International Organization, which was instrumental in the formation of the United Nations in 1945.

*Walter D. Stewart served on the War Industries Board in 1918. He also served on the Federal Reserve Board from 1922-25, and then joined the law firm of Case, Pomery, a Rockefeller firm. He was economic adviser to the Bank of England 1928-30, Special Adviser to Bank for International Settlements 1931, Rockefeller Foundation trustee 1939-50, Presidential Council of Economic Advisors for Eisenhower 1953-56, and later president of the Institute for Advanced Study.

External links

* [http://www.archives.gov/research_room/federal_records_guide/war_industries_board_rg061.html Records of the WIB at the National Archives]

Bernard M. Baruch was 75 years old in 1946 when President Harry S. Truman asked him to take the American proposal concerning atomic energy to the United Nations Atomic Energy Commission. The basis for the proposal was the Acheson-Lilienthal Report, which had been made public in March. Baruch decided to make some changes, which resulted in what became known as the Baruch Plan. He presented his plan to the first meeting of the UNAEC on June 14, 1946.

Born on August 19, 1870, in Camden, South Carolina, Bernard Mannes Baruch graduated from the City College of New York and eventually became a partner in the financial firm of A. Housman and Company where he later managed to buy a seat on the New York Stock Exchange. Baruch amassed his fortune before he was 30, started his own company, and by 1910 had become one of Wall Street’s financial leaders. He became an advisor to presidents, serving as the chairman for President Woodrow Wilson’s War Industries Board and as part of President Franklin D. Roosevelt’s “Brain Trust.”

The Acheson-Lilienthal Report had been developed by a committee headed by Dean Acheson, with advice from a board of consultants headed by David Lilienthal. Its intent was to bring atomic energy under the ownership of an international agency, with the secrets of atomic weapons being revealed, but with all countries renouncing any intention of developing more bombs.

Known as the “Park Bench Statesman” for his work giving counsel to congressional politicians on a bench across from the White House, Baruch made it clear that he intended to put his own stamp on the report before proposing it to the U.N. He delivered his message to the opening session of the U.N. Atomic Energy Commission at Hunter College in New York City on June 14, 1946. It specified swift and sure consequences for anyone breaking the rules, and placed the decision to impose those consequences beyond anyone's veto in the Security Council. It also laid out stages through which the United States would decommission its own nuclear weapons, but postponed the start of that reduction until after there were clear, worldwide guarantees that no one else would build such devices.

Baruch's speech began with words designed for impact, "We are here today to make a choice between the quick and the dead." Unfortunately, something was already dead and it was the Baruch Plan. The Soviet Union was firmly opposed on several counts. The purpose of vetoes in the Security Council was to ensure that the U.N. would not take action against any of the great powers. Baruch's plan would have abrogated that protection.

In addition, the delay envisioned that before the United States would begin dismantling its own weapons, it would give a probable several-year period in which the United States would have an advantage in any negotiations. This situation was intolerable to the Soviet Union.

Acheson had vehemently opposed allowing Baruch, a diplomatic amateur, to make changes to the Acheson-Lilienthal Report. His pessimism was justified. A desultory debate on the proposal continued into 1948, but there was no movement on either side. Before the end of the decade, the atomic arms race came into the open with the testing of the Soviet Union's first atomic bomb. Denied any real purpose, the U.N. Atomic Energy Commission lasted until 1951, when it was merged with the Commission for Conventional Armaments.

It was not until Eisenhower's Atoms for Peace speech in 1953 that serious proposals for international control of atomic weapons re-emerged. In it, Eisenhower proposed that both parties draw on their stockpiles of fissile materials to make contributions to an International Atomic Energy Agency, which would be connected to the United Nations. This material would be used by the agency to promote the peaceful pursuits of mankind, applying it to the needs of agriculture, medicine, and other peaceful activities. Nuclear power would bring electricity to power starved areas of the world. By finding peaceful uses for the atom, the inventiveness of man would be dedicated to life rather than death.

On Baruch’s 90th birthday, a commemorative plaque was placed on his “office” bench in Lafayette Park, across from the White House. He continued to give counsel on international affairs until his death in New York City on June 20, 1965, at the ripe old age of 94.

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