CHAPTER XXII

"WHO GOT THE MONEY?"

In April of 1922 two American Legion members in the House of Representatives, Roy O. Woodruff of Michigan, and Royal C. Johnson of South Dakota, created a national sensation by speaking in Congress for three hours on the subject of war-time profiteering. They gave that time-worn topic new life by an astounding revelation of the corruption, conspiracy, waste and mismanagement which marked the war and post-war financial transactions of the United States. They spoke by the book. In case after case they presented official records as evidence of the basis of their accusations which involve a loss to the Government of hundreds and millions and possibly billions of dollars which taxpayers are being pressed to replace.

They charged the almost complete breakdown of the Government's efforts at the detection, apprehension and prosecution of the guilty. Mr. Woodruff brought his remarks to conclusion by informing the House that unless affairs took a different turn he would move the impeachment of the Attorney-General.

The situation was brought to the attention of Commander MacNider with the suggestion that the profiteer issue, properly handled, could be turned into excellent propaganda in favor of the adjusted compensation bill, which at that moment was the object of the Commander's chief efforts.

"I cannot consider it on that basis," replied Mr. MacNider. "The Legion will make no compromises, no deals, and will invoke no outside issues in its fight for compensation. Compensation is a debt that is due, a debt the Government can afford to pay, and a debt whose payment will strengthen the economic fiber of the country. It will stand on its own feet. If there is anything in this profiteer question which presents an opportunity for the Legion to serve

the public interest, the Legion will undertake that service, but it will undertake it as a matter distinct and apart from adjusted compensation."

This was done. Mr. MacNider looked into the subject of profiteering, accepted it as a Legion issue and indicated to the Weekly its next big job. When I went to Washington to begin the investigations, we were confronted by this peculiar situation:

Were the Woodruff-Johnson charges true? They were; true, but incomplete. They had revealed not more than half a dozen letters of the profiteer's alphabet.

Would any good to the public come of it, or of any subsequent disclosures the Legion might make?

There were two answers to this question. One was that no good would come of it; that nothing would come of it, in fact. The Congressional outburst would be a nine days' wonder and the public would turn its attention to big league pennant races or something else equally as important and absorbing. Why? For these good reasons: "The Army cannot afford a scandal." "It would unsettle business." "Politics will prevent." And one able man in perfect sincerity said to me, "The Government itself cannot afford this thing. With the world in chaos, with once mighty nations torn and disintegrated on all sides of us, with such crises as the coal and railroad strikes at hand at home, popular faith must not be shaken."

Others said great good might come of it, especially if the American Legion took a hand. Under our republican form of government, what was the only power on earth that could force an exposure of the evils that existed, sending the looters to jail, forcing them to disgorge what they had stolen and making laws calculated to prevent a recurrence of such scandals in the future? Obviously, nothing but the power of public opinion aroused and informed and kept aroused and informed beyond the nine-days-wonder period. What great groups have we in the United States capable of this? Well,

there were the two major political parties. Forget them; they would do nothing they were not obliged to do. There remained the American Legion-unbossed, untrammeled, unimplicated. The Legion was the only hope so it was represented to me.

I was frequently asked what the Legion intended to do. I said it intended to get the facts and publish them without fear or favor. What then? That, I said, only the Legionwhich means a million men and women-knows.

But the hope that was reposed in what the Legion would do when confronted by those facts was the key that opened many a door in my researches.

To picture the situation it is necessary to turn back to the spring of 1917, when the United States entered the war. We witness all that is wholesome and fine-and much that is neither in a nation of one hundred million preparing for battle. Through this vortex of action two principal currents flow-one toward the mobilization of fighting forces, one toward the mobilization of industrial forces to keep the fighters in the fight. Our concern is with the latter.

Exclusive of loans to allies, Uncle Sam's war transactions involved about nineteen billion dollars, which included the outright purchase of about fifteen billion dollars' worth of material during the war, and the sale or expenditure in settlement of unfulfilled contracts after the Armistice of three or four billions' worth.

During the war Uncle Sam was a customer, and the richest, the easiest, the most lenient and desirable customer that has appeared on the horizon of commerce since the art of barter was discovered to man. He strode into the market and in a year and a half spent fifteen billion dollars, paying spot cash. He handed additional billions to his partners, his allies, virtually all of which was spent here in the home markets.

Uncle Sam not only paid spot cash but he set merchants up in business, built factories for them and then guar

anteed to take their entire output at tremendous profits. It was not always the little fellow who was staked. Some of the richest industrial corporations received enormous advances.

The "business administration" of the war has been highly praised. Much of this praise was merited, but a great deal of it was purely propaganda, which served the useful purpose of elevating morale and stimulating confidence, but which no longer serves any purpose that is useful or essential to good citizenship.

The drafting of soldiers was a reality. "Draft” was a word on every lip. It conjured to the mind a definite and a desirable picture: a picture of a democracy at war, duty requiring alike of the rich and the poor, the high and the low. We read of labor and capital being "drafted." It conjured a definite and a desirable picture which passed as a true portrait.

So became indistinguishable the true and the false, the draft that was a hard reality, the draft that was a deceptive play on a word. From this faulty perspective the Nation was permitted to view the hasty creation and the operation of the tremendous machine which was to solve the industrial issues of the conflict.

The question of supply naturally fell into the hands of those most likely to be able to do the supplying. The leather men controlled the leather buying, the great steel syndicates the steel production, the powder companies the powder orders, the packers the meat demands, and so on. And bear in mind the universal cry of speed, speed, speed, spend, spend, spend, spare no money, no effort, no means, no anything but deliver the goods.

What happened? The great majority of war contractors served their country faithfully, honestly and well. There was a case of a manufacturer who discovered his contracts were yielding profits which he deemed unjust to the Government. At his request the contracts were re-drawn and

the manufacturer returned to the Government several million dollars to which he was legally entitled but which he said he had not rightfully earned. Many others did not act with such faith, however. They stooped to conquer. They took advantage of the needs of the Government when its very existence was at stake. It was with this class and this class only that the Legion meant to concern itself.

Carelessness crept into the mighty machine which had been so hastily constructed to conduct the industrial administration of the war. Incompetence crept in. Extortion crept in. Graft crept in. Goods were sold at extortionate prices and at exorbitant profits. On hundreds of items the Government enormously over bought. Enough of some things were purchased to keep the war going twenty years. Instances of waste and extravagance have been revealed which are so flagrant as to impel the conclusion that they were deliberate in order to increase purchases and profits for favored contractors. Favoritism was rife. Schemers among profiteering producers dealt openly with confederates in the government service.

Contracts were of the loosest possible variety. Every advantage was with the contractor, every disadvantage with the Government which was at war. It was the practice to draft contracts so that no possible loss could be sustained by the contractor. The charge is made that whole industries held the Government at their mercy, fixed prices to suit themselves, and dictated the terms of contracts whereby they stood no earthly chance of losing a dollar while the Government could-and did-lose millions. It was heads I win, tails you lose, the most perfect example of the game in all history-and for the highest stakes.

The Armistice brought an instantaneous and absolute upset in the situation. Uncle Sam, world's best customer, became Uncle Sam, merchant, with one of the world's largest and most varied assortment of goods on his shelves. No one knows or likely ever will know their true value, but