Demobilization

One of the major industrial activities conducted in the United States during the war was the construction of buildings for the Army. The Army’s physical plant, as it existed on the day war was declared, was entirely inadequate for the forces to be mobilized—so inadequate as to be of almost no use at all. Even the old headquarters of the War Department in Washington, which formerly had housed practically all the administrative offices, were none too large to accommodate merely the office staffs of the Secretary of War and his principal assistants, so great was the expansion of the central administration; and as for the tens of thousands of officers, clerks, stenographers, messengers, and other personnel employed by the great producing and operating bureaus, they occupied literally miles of flimsy, unsightly “war buildings,” which spread out like a defacing rash over the fair open spaces of the capital city.

An even greater expansion of plant was to be observed throughout the country. The plant set up for the Army mobilized against Germany was a practically new creation, specialized for exactly the sort of war in which we were engaged. It was a war in which land transportation had to be linked to ocean transportation, and therefore the plant included vast facilities for the embarkation of troops and a string of mighty export terminals, or bases, strung out along the coast in order to make difficult any blockade of our overseas supply line. It was a war essentially industrial in type, with unusual emphasis laid upon the development of special industrial products, such as powder and explosives; and therefore the plant included dozens of new mills and factories, several of them industrial centers so large as to be virtually small cities in themselves, with housing and modern municipal conveniences for their employees. It was a war in which new and hitherto unknown forms of combat had sprung into existence, and therefore the plant included equipped fields for the training of soldiers in such arts as flying and the employment of poisons as weapons. Above all, it was a war which called upon the ultimate resources of American man power; and, as it turned out, the plant had to be adequate to house, school, amuse, care for, and maintain at least two million men, with all that that implies in barracks, drill grounds, parks for vehicles, water and sewer systems, lighting systems, roads, hospitals, and (in the maintenance line) depots and warehouses for supplies.

It was all fresh creation, new construction. The building industry of the United States—and it is one of the largest and strongest of our industries—had never before been called upon to provide such expansion in an equal time. It follows that the entire building industry must have been engaged in the construction enterprise, that every available man who could drive a nail or lay a brick must have been employed upon government work. If he was not, he should have been; for those in charge of the construction, unable to secure sufficient labor from the entire building industry of the United States, sent ships to Porto Rico and the Bahamas and brought back thousands of workmen to help out. The Construction Division, the war-begotten organization which was in charge of this activity, with 427,000 men on its contractors’ pay rolls at the peak of its industriousness, yielded only to the United States Railroad Administration the title of greatest employer of war labor. It engaged in 581 separate construction projects, which called for an expenditure of over $1,100,000,000; and it completed most of them.

Miles of docks, hundreds of acres of covered storage, hundreds of power plants and complete water systems, thousands of miles of roads, railroads, water mains, and sewer lines—the list grows monotonous simply because of the size of its items, which are not to be visualized by stating them in terms of acres and miles. The activity was at its height at the signing of the armistice, when it became incumbent upon the Construction Division to terminate the work.

Four hundred and fifty army construction projects were under way on the day of the armistice. One hundred and thirty-one stood completed. The incomplete projects included some of the largest and costliest ones. But the salvage value of buildings is small unless they can be sold to purchasers able to make use of them as and where they stand. Few war buildings were adapted to civilian use. They were highly specialized for a purely war use, and they were not often located where they could be of economic benefit to the country. A large part of their cost represented the evanescent element of labor, a value entirely destroyed when buildings are wrecked for the sake of salvaging their materials. The war plant, even incomplete, represented an immense investment, but one which would be almost altogether lost if the plant were to be knocked down for salvage. Therefore it was of advantage to the Government to carry on a surprisingly large amount of war construction after the armistice for the sake of getting the use-value from its investment by occupying these installations with the permanent Army.

But there were other reasons for continuing work. Among the largest and costliest of the construction projects were those which provided the ocean terminal bases at Boston, Brooklyn, Philadelphia, Norfolk, Charleston, and New Orleans. These installations were all of durable, fireproof construction; and, with their piers, their great warehouses equipped with labor-saving machinery, trackage, and the like, they were the last word of modern constructional science in developments of this sort. In appropriating the money for these port works, Congress had stipulated that after the war they should be used in the development of American foreign trade. Consequently the Construction Division went ahead after the armistice and finished up these buildings.

The port works alone were enough to account for a large portion of the money expended on construction after the armistice, but in addition other great unfinished projects were carried through. As we have shown, the storage problem became acute only after the armistice, when the wasteful field consumption of supplies ceased and the materials coming from the war factories banked up in this country. Every warehouse and depot project incomplete on the day of the armistice was pressed to completion thereafter in order to provide shelter for valuable and perishable materials. This was another great branch of post-armistice construction. Add to these the continued construction of hospitals (which had to be prepared to receive the thousands of wounded men in France on the day of the armistice), and it becomes evident why thousands of the war builders were kept on the job after the war itself had come to an end.

The fate of every incomplete army construction project on the day of the armistice was submitted to the Operations Division of the General Staff, which looked at the percentage of completion, noted whether the Government owned the ground on which the construction was going forward, studied the availability of the building for commercial use, and determined whether it was needed in the military plans, and then recommended that the construction be abandoned, curtailed, or completed. In general, the projects abandoned were those providing additional facilities for the assembling and training of troops and those providing plants for the production of destructive munitions, such as toxic gas, powder, and loaded shell. Of the 450 projects incomplete on the day of the armistice, 182 were abandoned and 268 carried through.

The completion of so large a quantity of the war construction after the armistice enabled the Construction Division to go through the demobilization of its industry without accumulating large stores of surplus materials. Although in form, at any rate, the Division dealt directly only with contractors who took the various jobs, actually the Division itself procured the lumber, cement, brick, structural steel, roofing, hardware, and the like, for the builders. The demand of the war construction upon the supplies of building materials was so great that nothing less than a centralized stimulation and control of the entire market could have procured the materials in the quantities needed. The Construction Division’s Procurement Division located the supplies and then arranged each building contractor’s deals for them, even stipulating the producers, quantities, and the prices which must be paid for materials. This last was important, because the war builders worked under a sharply safeguarded cost-plus contract form, and therefore the Government was keenly interested in what the materials cost. In addition to procuring supplies for the contractors, the Procurement Division also purchased equipment for the war buildings—heating, ventilating, and power plants, fire extinguishers, refrigeration equipment, boilers, engines, and machinery of many sorts. Its purchases ran at the rate of $2,000,000 a day in the early autumn of 1918.

After the armistice and after the temporary suspension of effort requested in order to give the Construction Division time in which to take stock of its position, the production of building materials and supplies of which the Government would be able to make no use was rapidly terminated. The Procurement Division was made up of experts in all branches of building construction, and therefore this Division was made over after the armistice into the Construction Division Claims Board for liquidating its war business under the direction of the War Department Claims Board. In six months practically all the terminated contracts had been finally settled by this organization, at an average cancellation cost of 5 per cent of the face value of the contracts.

The termination of supply contracts and of contracts with constructors of buildings not needed by the War Department after the armistice, left the Construction Division with large quantities of supplies on its hands. But these were by no means surplus supplies. The completion of a large quantity of war construction after the armistice saved the Construction Division from having to solve the problem of disposing of much surplus. Supplies accumulated for the terminated jobs were simply diverted to those ordered completed and thus utilized.

But although the Division had no large quantity of building supplies to sell, it was charged, after the armistice, with the duty of disposing of the facilities at the 182 construction projects which were terminated. Many of these projects were large ones, those in this category being for the most part training camps for troops. There was a camp shortage in 1918, and the Construction Division was doing everything in its power to overcome it. We were sending men overseas at the rate of 300,000 a month; and, since it was desirable to give every overseas soldier at least six months’ training, that implied camp accommodations for 1,800,000 men in the United States. The actual accommodations provided were for less than 1,370,000 troops. In 1918, after the augmented rate of embarkation became a fact, new training camp projects were consequently inaugurated at frequent intervals. Only a few days before the armistice the Construction Division began the construction of an enormous new camp which was to specialize in the training of infantry. All the national guard camps (sixteen of them) and most of the special-purpose camps, whether completely built or not, were condemned after the armistice for salvage. Most of these were veritable cities, some of them large enough to accommodate 40,000 men each, comfortably—with the adverb accented, for the comfort was based on such substantial (and costly) installations as water and sanitation systems, electric lighting, pavements, sidewalks, and even stores, theatres, and gymnasiums. It was the task of the Construction Division to dispose of these cities to such members of the public as cared to buy.

A city, however, is something more than an accumulation of buildings and other tangible facilities. Quite as much as upon foundations of rock, a city rests upon logic—the logic of its location. Naturally the Government built its camps upon cheap land, therefore upon land not in demand by the population, therefore upon land not so located as to make it a logical place for a city. And so, although it was thought at first that perhaps some of these camps might prove to be the nuclei of permanent civilian communities, that notion soon had to be abandoned for the reason that few civilian movements arose to occupy permanently the former war buildings. An attempt was made, and still is being made, to use the former Nitro Powder Plant as a permanent civilian industrial city, and one or two training camps in the South have been held together by their purchasers with the idea of establishing communities on their sites. The others, however, in which the Government had sunk hundreds of millions of dollars, were sold out to the wreckers, who bought them for the sake of salvaging the building materials.

Now, there is nothing quite so second-hand as second-hand building materials. Boards are full of nail holes and sometimes covered with faded paint or disfiguring marks. Bricks are soiled, chipped, and worn, and conglomerated with stonelike mortar. Hardware and metallic fixtures are corroded and rusty. Such materials are not only wreckage and junk, but not even valuable junk. The chief cost in the construction of a training camp was the labor which laid the brick, installed the underground piping, smoothed, squared, and nailed up the lumber, and soldered the joints in the plumbing. All that labor value was lost when camps were salvaged for their materials.

Yet this was not the only loss which the Government was forced to sustain. Practically all the camps were originally located on leased ground; and this fact implied that in razing the camps the Government was bound to restore the land to its original condition, or, in lieu of that, to pay to the owners the costs of restoration. These questions of property damage greatly complicated the demobilization of the training camps, because the amounts of damage were so hard to ascertain. Concrete roads had been laid across what were originally pastures; fertile corn lands were crisscrossed with clay ridges thrown up above the water and sewer trenches. On the other hand, some of the camp improvements had drained former swamps and reclaimed them for cultivation, and such benefits would offset damages in other places. It was out of the question for the Government to attempt to settle these thousands of cases individually, because of the time it would take; and therefore it was stipulated that the purchasers of the camps must assume all liabilities for property damage and hold the Government harmless from claims that might later be pressed in the Court of Claims. Naturally the purchasers made allowances for these damages in their bids, and wide allowances, too, since the extent of the damages was largely conjecture. This consideration further depressed the prices paid by the purchasers.

The result was that the salvage of abandoned army camps brought back to the Government only a small fraction of the money put into them. Actually in scores of instances it would have been cheaper for the Government to abandon the improvements to the landowners in return for quit-claims for the property damage. Public policy, however, prohibited such a short-cut method. Some of the leased sites had been donated to the Government before the armistice at the nominal rental of $1.00 a year or some other slight sum; but afterwards the chambers of commerce and other civic agencies which had made these concessions, for the sake of securing camps near their communities, refused to renew the arrangements, and the War Department was forced to pay regular rentals. Here was a consideration to force the sale of the camps on any terms possible. The chief lesson learned from the war construction enterprise was that the Government should buy and not lease a site when the value of the improvements is to exceed the value of the site itself. Only by holding such property for permanent use or gradual sale can the Government get value received for its investment.

In general, the salvage recovery from camps and other installations sold after the armistice amounted to about 15 per cent of the money invested in the original building materials. All labor values were lost. All wastage of materials in construction and demolition was loss. Many materials such as cement and concrete, road material, roofing, wood-stave piping, sewer piping, and so on, were a complete loss. The attention of the reader is invited to some typical shrinkages in value.

Note, however, that in disposing of these camps, the Government retained practically all the storage and hospital facilities.

During the year following the armistice the Construction Division disposed of fourteen national guard camps, three embarkation camps, sixteen special and regular training camps, four flying fields, four hospitals, and many small groups of buildings. For these the Government received about $4,215,000. In addition, parts of many other camps were sold; also construction materials of practically every sort.

The most spectacular accomplishment of the Construction Division before the armistice was the building of the cantonments, the primary training camps which housed the soldiers summoned into the military service by the Selective Service Law. These were much more substantial installations than the national guard camps, the salvaging of six of which was noted in the tabular statement above. The national guard camps provided only tentage for the shelter of troops, whereas the cantonments housed their inhabitants in stanch wooden barrack buildings. A cantonment cost from two to three times as much as a national guard camp. Yet, on three months’ notice, at the beginning of which not even the sites had yet been selected and acquired, the Construction Division prepared sixteen cantonments ready to receive the first inductives called to the colors.

The cantonments originally were all built upon leased ground. It was evident that, if the Government were forced to vacate the ground to the owners, the cantonments, salvaged for their building materials, would bring no greater recovery percentage of their cost than did the tentage camps. The Government’s loss, in such an event, on each cantonment would be twice or three times what it proved to be on the national guard camps. Before the end of the war was in sight the Construction Division had anticipated demobilization by presenting a plan to the Secretary of War for the purchase of the sites of the cantonments. Purchase would accomplish several desirable ends. As long as the cantonments were in use it would save the payment of rents. After the war was over, if the cantonments were retained by the Army, it would give the cantonments their full use-value, which was every penny they had cost. If, on the other hand, the decision was to dispose of them after the advent of peace, then ownership of the sites would permit the Government (1) to market the materials gradually and avoid beating down prices by glutting the market; or (2) to sell buildings intact, with the land on which they stood; or (3) to sell entire cantonments as they stood, together with title to the lands. Any one of these methods of disposition would bring a far greater salvage return than the forced sale of the materials and the payment of property damages.

In March, 1919, the Assistant Secretary of War directed that the leased sites of fourteen of the cantonments—namely, Camps Custer, Devens, Dix, Dodge, Gordon, Grant, Lee, Jackson, Meade, Pike, Sherman, Taylor, Travis, and Upton—be acquired by purchase. The investment in these cantonments was approximately $155,000,000. By continuing to use the cantonments, the War Department could get full value received for the money expended. By salvaging them after the manner of disposing of the national guard camps, the Government might recover $4,000,000 at the outside estimate. By selling the materials gradually or the buildings intact with lands, the recovery could be expected to run as high as $48,000,000. The business logic of the proposition was irresistible.

The purchase of this vast quantity of land was undertaken by the Construction Division. After the commanding officers at the cantonments had indicated what boundaries should be included, the Division sent out its field forces—on April 21, 1919. First to go to work were engineers and surveyors to fix accurate boundaries and secure complete metes-and-bounds descriptions of the properties. Contracts were drawn with various responsible title companies to make search of the land titles and to guarantee them with title insurance. Next followed acquisition officers who closed sale contracts with the private owners. The sale contracts were finally signed in behalf of the Government by competent officers. With the acquisition officers traveled disbursing officers of the Finance Service who stood ready to pay spot cash for the lands the moment the sale contracts were signed. So rapidly was this work carried on that in two months the Government had acquired ownership to more than half the area on which the fourteen cantonments stood. A year later about 55,000 acres had passed in fee simple to the United States at a price of $6,762,000. Considerable property was yet unacquired; but, although it had been estimated that the sites would cost ultimately $9,657,000, the indications then were that the Government would secure them for not more than $8,115,000.

It was found to be impossible, however, to secure all the property so simply and easily. Some owners would not sell at reasonable prices; other owners could not be found; still others were under legal disabilities which prevented them from selling. In such instances the recourse of the Government was condemnation of the lands. Proceedings were instituted eventually to condemn some 22,000 acres for government use. The condemnation proceedings were conducted by the Department of Justice, which found this work to be one of great magnitude.

One of the interesting war developments in the United States was the change in the attitude of the War Department toward real estate. Before the war the various bureaus and other agencies of the War Department acquired their own real estate by lease or purchase as they needed it and as they could secure authority to procure it. The war itself resulted in an intense demand for real estate by the War Department as sites for its war buildings or as quarters to be occupied under lease. Real estate, therefore, came to be regarded as a commodity in the supply of the Army; just as much a commodity as food or ammunition. And, as the procurement of other commodities was eventually administered and controlled by a centralized agency, so the centralized procurement of real estate was placed in the hands of a new organization called the Real Estate Service.

The Real Estate Service acted as the Army’s real estate agent. The various bureaus still originated the projects for the acquisition of property, and then the Real Estate Service acquired the property as agent for the bureaus. The Service was composed of experts who saw to it that deeds and leases were correctly drawn and that the Government made good bargains.

The armistice, if anything, meant increased effort for the Real Estate Service, since the problem of the storage of surplus supplies was to be solved only by the acquisition of space. It was also necessary to dispense with high-priced locations, essential as they had been during the actual hostilities, and to substitute more economical facilities. Many of the War Department’s war factories had been built on leased sites, and it was necessary to purchase these sites wherever it was expedient for the Department to retain the factory as a preparedness asset or where it was good business to buy the land in order to sell the factory advantageously.

Although few obstacles had been thrown in the way of the War Department in purchasing property, it was discovered after the armistice that, because of existing and obsolete laws, it was most difficult to sell any. Up to the declaration of war the law which controlled this function provided that war department lands useless for military purposes should be sold by the Secretary of the Interior. When this law was enacted (1884) most of the lands occupied by the Army had come from the public domain, and it was logical to turn them back to that source when the War Department was through with them. In May, 1917, Congress authorized the War Department itself to sell national guard target ranges. In July, 1918, Congress authorized the President to sell, through the head of any Executive Department, lands acquired after the declaration of war against Germany to be the sites of war factories. In July, 1919, Congress authorized the sale under identical conditions of lands acquired for storage purposes. These, however, were the only exceptions granted to the original rule. In fact, when the War Department went about the purchase of the fourteen cantonment sites for the possible purpose of selling these lands later and thus getting better prices for the buildings on them, it did so with the knowledge that it would take a special act of Congress to authorize such a sale.

Congress, without warning, attached a rider to the appropriation bill which was approved on July 11, 1919, forbidding the expenditure of any more money at all in the purchase of real estate by the Army except at the national guard camps or at the cantonments in use before November 11, 1918, and also except where the purchase of sites of industrial plants was necessary to protect the Government’s interests. The Secretary of War ruled that the fourteen cantonments then being purchased were exempt from this inhibition, but the law abruptly put an end to projects of the Real Estate Service to buy some 300,000 acres at a cost of $8,000,000. At that time the Service was buying 115,000 acres of land at Columbus, Georgia, to serve as an infantry school of arms, 120,000 acres at Fayetteville, North Carolina, to be an artillery range, and several other large acreages for various military purposes. The project to acquire Camp Humphreys, the Engineers’ camp in Virginia near the city of Washington, about 4,000 acres, was allowed to go through.

On the first day of the armistice the War Department was a party to leases obligating it to pay $13,000,000 in rentals annually. By the end of December, 1919, the Real Estate Service had made a large net reduction in the number of leases, and the annual rent bill had dropped to approximately $5,000,000, although in that interval the Service had acquired by lease hundreds of millions of square feet of new storage space.